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INFO for (Q18) (Q18) Lorelai Fillmore runs the Independence Inn, in the quaint town of Stars Hollow. Independence Inn is a boutique B&B with
INFO for (Q18) (Q18) Lorelai Fillmore runs the Independence Inn, in the quaint town of Stars Hollow. Independence Inn is a boutique B&B with a charming New England feel to it. They have 18 suites that have a list price of $475 per night. The fall colors are expected to peak in early November. During the summer they offer 40% off discounts on the list price for fall bookings (i.e., low list price is $285). It is surely possible to book all of their rooms for November 1 at the discounted rate. However, it is their experience that in the last two weeks of October they receive some last-minute booking requests for the list price ($475 per night). Question 18 2 pts Their forecasting model suggests that the number of last-minute bookings would be Poisson distributed with mean 3.5. What is the maximum number of discounted booking they should be willing to accept if they want to maximize their expected revenue from their inventory of rooms?
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