The Harriet
Hotel in downtown Boston has 100 rooms that rent for $150 per night. It costs
the...

Question

The Harriet
Hotel in downtown Boston has 100 rooms that rent for $150 per night. It costs
the hotel $30 per room in variable costs (cleaning, bathroom items, etc.) each
night a room is occupied. For each reservation accepted, there is a 5% chance
that the guest will not arrive. If the hotel overbooks, it costs $200 to
compensate guests whose reservations cannot be honored. 

a. How many
reservations should the hotel accept if it wants to maximize the average daily
profit?

Anjali · Accepted Answer

Sheet1
	Analysis for harriet hotel in downtown Boston 
		Total number of rooms available 	100
		Rent of a single room 	150
		Variable costs 	30
		overbooking cost	200
		Room availability 	100
		Probabaility of No show 	0.05	5%
		No. reservations 	110	 Decision taken:

The Harriet Hotel in downtown Boston has 100 rooms that rent for $150 per night. It costs the hotel $30 per room in variable costs (cleaning, bathroom items, etc.) each night a room is occupied. For...

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