A motel with a total room of 50 rooms. Manager is looking to apply the revenue management to increase the profit. You want to include the internet discounter option which you are guaranteed an revenue for up to 30 rooms at the price of 100$ a night.

Normally, the hotel would cost 250$ a night. Regular customer follows the demand of normal distribution with mean =70-(price/10) and standard deviations of 5. Fixed cost 1000$.

Cost per night is 15$, 25$, 35$, 45$ and 60$ with probability of 5%, 25%, 40%, 25%, 5% .

Use a Yasai excel simulation to calculate (a) if you allocate 10 rooms to the internet discounter, what is your expected profit? Use 300$ as price. Then calculate the 95% confident level for that expected profit.

(b)what is the best room allocation strategy if you change number of room to allocate to internet discounter using 5,10,15,20,25,30?