Managers at the Dew Drop Inn are concerned about the increasing number of guests who make reservations but fail to show up. They have decided to institute a policy of overbooking like larger hotel chains. The profit from a paying guest averages $50 per room per night. The cost of putting up a guest at another hotel is $100 per room per night.
Records show the following number of no-shows over the past three months:
No-Shows Frequency
0 ...........18
1 ...........36
2 ...........27
3 ...............9
How many rooms should Dew Drop overbook?