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What is the overage cost of a full-price room

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Reference no: EM133597018

Case Study: Hilton on Time Square, New York City, has 444 guest rooms. Hilton can sell all its hotel rooms at a discounted price of $260 per night to customers with a two-week advanced purchase. Hilton can also sell its hotel rooms at its full price of $380 per night to customers without advanced purchase. For any unsold hotel room, Hilton has a 75% chance of selling it to some bidder from priceline.com at $120 per night on the day before. The number of customers who buy at full price without advanced purchase can be 100, 200, 300, or 400, with equal probability. Answer the following questions.

Question: 1. What is the overage cost of a full-price room?

 

Reference no: EM133597018

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