Question
Inn at Penn has 200 rooms. For regular-fare customers, rooms are priced at $300 per night, while the rooms are priced at $700 per night
Inn at Penn has 200 rooms. For regular-fare customers, rooms are priced at $300 per night, while the rooms are priced at $700 per night for the high-paying customers who generally arrive at the last minute. The demand for such high-fare customers is distributed normally with mean 75 and standard deviation 60. Assume that there is ample demand for regular-fare customers.
Suppose that Inn at Penn operates with the protection level of 85 rooms for high-fare customers. On average, how many high-fare customers are turned away because of a lack of rooms?
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