Q1. Hotel manager Mr. Smith and his resourceful assistant, John, run a 26-room hotel in a little town. A combination of Mr. Smith's friendly attitude and the absence of a respectable hotel in the nearby vicinity imply that Mr. Smith enjoys sufficient demand at his low fare of $159 per night. John notes that some customers will walk into the hotel requesting a room for that evening and they are willing to pay a high fare of $325 per night. John knows this demand is variable. (In reality, this demand is U(4,9)) He suggests some rooms should be kept unsold to the low-fare customers so that they can serve the high-fare customers. a) To maximize profits with John's plan, what is the booking limit that should be set for low fare customers? b) Mr Smith does not like the idea of John and says “we will sell to everyone who reserves in advance and ignore the walk-in demand." If Mr Smith has his way, what will be the hotel's expected revenue? C) John replies, "If you are going to forgo the opportunity to sell to last-minute customers, let's at least accept more than 26 reservations for the evening." Checking the data, John observes that the number of "no-shows" is uniformly distributed with U(1,8). (Recall, a "no-show" is when a customer makes a reservation but doesn't show up to use the room that evening.) John also notes that a $100 non-refundable deposit is required with all reservations. However, if the hotel does not have a room for a reservation holder, then they need to book that person in a B&B in the nearest town. They decide that in those cases they would refund the customer's deposit and pay for the customer's stay in the B&B, which is $450. The customer would not be happy, but they are getting a free night, so John figures that there would be no loss of goodwill. Finally, if they have an empty room due to a no-show, they also figure that they would not be able to fill the room with a last-minute customer. What is the overbooking quantity to maximize revenue?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
Q1. Hotel manager Mr. Smith and his resourceful assistant, John, run a 26-room hotel in a little town. A combination of Mr. Smith's friendly attitude and the absence of a respectable hotel in the nearby vicinity imply that Mr. Smith enjoys sufficient demand at his low fare of $159 per night. John notes that some customers will walk into the hotel requesting a room for that evening and they are willing to pay a high fare of $325 per night. John knows this demand is variable. (In reality, this demand is U(4,9)) He suggests some rooms should be kept unsold to the low-fare customers so that they can serve the high-fare customers.
a) To maximize profits with John's plan, what is the booking limit that should be set for low fare customers?
b) Mr Smith does not like the idea of John and says “we will sell to everyone who reserves in advance and ignore the walk-in demand." If Mr Smith has his way, what will be the hotel's expected revenue?
C) John replies, "If you are going to forgo the opportunity to sell to last-minute customers, let's at least accept more than 26 reservations for the evening." Checking the data, John observes that the number of "no-shows" is uniformly distributed with U(1,8). (Recall, a "no-show" is when a customer makes a reservation but doesn't show up to use the room that evening.) John also notes that a $100 non-refundable deposit is required with all reservations. However, if the hotel does not have a room for a reservation holder, then they need to book that person in a B&B in the nearest town. They decide that in those cases they would refund the customer's deposit and pay for the customer's stay in the B&B, which is $450. The customer would not be happy, but they are getting a free night, so John figures that there would be no loss of goodwill. Finally, if they have an empty room due to a no-show, they also figure that they would not be able to fill the room with a last-minute customer. What is the overbooking quantity to maximize revenue?
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