Six months before its annual convention, the AmericanMedical Association must determine how many rooms toreserve. At this time, the AMA can reserve rooms at a costof $50 per room. The AMA must pay the $50 room costeven if the room is not occupied. The AMA believes that thenumber of doctors attending the convention will be normallydistributed, with a mean of 5,000 and a standard deviationof 1,000. If the number of people attending the conventionexceeds the number of rooms reserved, extra rooms must bereserved at a cost of $80 per room. Use simulation todetermine the number of rooms that should be reserved tominimize the expected cost to the AMA.

Six months before its annual convention, the AmericanMedical Association must determine how many rooms toreserve. At this time, the AMA can reserve rooms at a costof $50 per room. The AMA must pay the $50 room costeven if the room is not occupied. The AMA believes that thenumber of doctors attending the convention will be normallydistributed, with a mean of 5,000 and a standard deviationof 1,000. If the number of people attending the conventionexceeds the number of rooms reserved, extra rooms must bereserved at a cost of $80 per room. Use simulation todetermine the number of rooms that should be reserved tominimize the expected cost to the AMA.

Operations Research : Applications and Algorithms

4th Edition

ISBN:9780534380588

Author:Wayne L. Winston

Publisher:Wayne L. Winston

Chapter23: Simulation With The Excel Add-in @risk

Section23.1: Introduction To @risk: The News Vendor Problem

Problem 6P

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