Tariott Hotel rents rooms for $125 a night that cost approxi-mately $50 per day to maintain. Overbooking is a common practice in the industry. Customers whose rooms have beenleased to someone else are put up in a nearby hotel for $100a night. Records show that during the past month, therewere 10 days with zero no-shows, 5 days with 1 no-show, 6days with 2 no-shows, and 9 days with 3 no-shows.a. What is the cost of overbooking?b. What is the cost of underbooking?c. What is the optimum probability of no-shows for Tariott?d. How many rooms should Tariott overbook?
Contingency Table
A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.
Binomial Distribution
Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.
Tariott Hotel rents rooms for $125 a night that cost approxi-
mately $50 per day to maintain. Overbooking is a common
practice in the industry. Customers whose rooms have been
leased to someone else are put up in a nearby hotel for $100
a night. Records show that during the past month, there
were 10 days with zero no-shows, 5 days with 1 no-show, 6
days with 2 no-shows, and 9 days with 3 no-shows.
a. What is the cost of overbooking?
b. What is the cost of underbooking?
c. What is the optimum
d. How many rooms should Tariott overbook?
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