A hotel near the university always fills up on the evening before football games. History has shown that when the hotel is fully booked, the number of last-minute cancellations has a mean of 5 and standard deviation of 3. The average room rate is $130 and customers need to pay when they make the reservation. When the hotel is overbooked, its policy is to find a room in a nearby hotel and to pay for the room for the customer and this usually costs the hotel approximately $200 since rooms booked on such late notice are expensive. How many rooms should the hotel overbook?

A hotel near the university always fills up on the evening before football games. History has shown that when the hotel is fully booked, the number of last-minute cancellations has a mean of 5 and standard deviation of 3. The average room rate is $130 and customers need to pay when they make the reservation. When the hotel is overbooked, its policy is to find a room in a nearby hotel and to pay for the room for the customer and this usually costs the hotel approximately $200 since rooms booked on such late notice are expensive. How many rooms should the hotel overbook?

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Description: A hotel near the university always fills up on the evening before football games. History has shown that when the hotel is fully booked, the number of last-minute cancellations has a mean of 5 and standard deviation of 3. The average room rate is $13

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter10: Introduction To Simulation Modeling

Section: Chapter Questions

Problem 29P: Six months before its annual convention, the American Medical Association must determine how many...

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