A linear programming computer package is needed. Hanson Inn is a 96-room hotel located near the airport and convention center in Louisville, Kentucky. When a convention or a special event is in town, Hanson increases its normal room rates and takes reservations based on a revenue management system. A large professional organization has scheduled its annual convention in Louisville for the first weekend in June. Hanson Inn agreed to make at least 50% of its rooms available for convention attendees at a special convention rate in order to be listed as a recommended hotel for the convention. Although the majority of attendees at the annual meeting typically request a Friday and Saturday two-night package, some attendees may select a Friday night only or a Saturday night only reservation. Customers not attending the convention may also request a Friday and Saturday two-night package, or make a Friday night only or Saturday night only reservation. Thus, six types of reservations are possible: Convention customers/two-night package; convention customers/Friday night only; convention customers/Saturday night only; regular customers/two-night package; regular customers/Friday night only; and regular customers/Saturday night only. The cost for each type of reservation is shown below. Two-Night Package Friday Night Only Saturday Night Only Convention $225 $123 $130 Regular $295 $146 $152 The anticipated demand for each type of reservation is as follows. Two-Night Package Friday Night Only Saturday Night Only Convention 40 20 15 Regular 20 30 25 Hanson Inn would like to determine how many rooms to make available for each type of reservation in order to maximize total revenue. (a) Formulate a linear programming model for this revenue management application. (Let CT = number of convention two-night rooms, CF = number of convention Friday only rooms, CS = number of convention Saturday only rooms, RT = number of regular two-night rooms, RF = number of regular Friday only rooms, RS = number of regular Saturday only rooms.) Max ______ s.t. anticipated demand for convention two-night rooms:_____ anticipated demand for convention Friday night only rooms:_____ anticipated demand for convention Saturday night only rooms:_____ anticipated demand for regular two-night rooms:_____ anticipated demand for regular Friday night only rooms:_____anticipated demand for regular Saturday night only rooms:_____ Friday night rooms available for convention attendees only. Check which variable(s) should be in your answer. Saturday night rooms available for convention attendees only:_____ total rooms available for Friday night:_____ total rooms available for Saturday night:_____ CT, CF, CS, RT, RF, RS ≥ 0 (b) What is the optimal allocation? CT = ___ CF =____ CS = ___RT = 20 RF = 28 RS = ___From this allocation, what is the anticipated total revenue (in dollars)? $_____ (c) Suppose that one week before the convention the number of regular customers/Saturday night only rooms that were made available sell out. If another nonconvention customer calls and requests a Saturday night only room, what is the value (in dollars) of accepting this additional reservation? If the hotel accepts this additional reservation, then the total profit would increase by $ _____
A linear programming computer package is needed. Hanson Inn is a 96-room hotel located near the airport and convention center in Louisville, Kentucky. When a convention or a special event is in town, Hanson increases its normal room rates and takes reservations based on a revenue management system. A large professional organization has scheduled its annual convention in Louisville for the first weekend in June. Hanson Inn agreed to make at least 50% of its rooms available for convention attendees at a special convention rate in order to be listed as a recommended hotel for the convention. Although the majority of attendees at the annual meeting typically request a Friday and Saturday two-night package, some attendees may select a Friday night only or a Saturday night only reservation. Customers not attending the convention may also request a Friday and Saturday two-night package, or make a Friday night only or Saturday night only reservation. Thus, six types of reservations are possible: Convention customers/two-night package; convention customers/Friday night only; convention customers/Saturday night only; regular customers/two-night package; regular customers/Friday night only; and regular customers/Saturday night only. The cost for each type of reservation is shown below. Two-Night Package Friday Night Only Saturday Night Only Convention $225 $123 $130 Regular $295 $146 $152 The anticipated demand for each type of reservation is as follows. Two-Night Package Friday Night Only Saturday Night Only Convention 40 20 15 Regular 20 30 25 Hanson Inn would like to determine how many rooms to make available for each type of reservation in order to maximize total revenue. (a) Formulate a linear programming model for this revenue management application. (Let CT = number of convention two-night rooms, CF = number of convention Friday only rooms, CS = number of convention Saturday only rooms, RT = number of regular two-night rooms, RF = number of regular Friday only rooms, RS = number of regular Saturday only rooms.) Max ______ s.t. anticipated demand for convention two-night rooms:_____ anticipated demand for convention Friday night only rooms:_____ anticipated demand for convention Saturday night only rooms:_____ anticipated demand for regular two-night rooms:_____ anticipated demand for regular Friday night only rooms:_____anticipated demand for regular Saturday night only rooms:_____ Friday night rooms available for convention attendees only. Check which variable(s) should be in your answer. Saturday night rooms available for convention attendees only:_____ total rooms available for Friday night:_____ total rooms available for Saturday night:_____ CT, CF, CS, RT, RF, RS ≥ 0
(b) What is the optimal allocation? CT = ___ CF =____ CS = ___RT = 20 RF = 28 RS = ___From this allocation, what is the anticipated total revenue (in dollars)? $_____
(c) Suppose that one week before the convention the number of regular customers/Saturday night only rooms that were made available sell out. If another nonconvention customer calls and requests a Saturday night only room, what is the value (in dollars) of accepting this additional reservation? If the hotel accepts this additional reservation, then the total profit would increase by $ _____
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