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QUESTION ONE a. Evans Enterprises has bought a prime parcel of beach-front property and plans to build a luxury hotel. After meeting with the architectural
QUESTION ONE a. Evans Enterprises has bought a prime parcel of beach-front property and plans to build a luxury hotel. After meeting with the architectural team, the Evans family has drawn up some information to make preliminary plans for construction. Excluding the suites, which are not part of this decision, the hotel will have four kinds of rooms: beach-front nonsmoking, beach-front smoking, lagoon view non-smoking, and lagoon view smoking. In order to decide how many of each of the four kinds of rooms to plan for, the Evans family will consider the following information: - After adjusting for expected occupancy, the average nightly revenue for a beach-front non-smoking room is 175. The average nightly revenue for a lagoon view nonsmoking room is 130. For smoking rooms: nightly revenues are 190, and 145 for beach-front and lagoon types, respectively. - Construction costs vary. The cost estimate for a lagoon view room is 12,000 and for a beach-front room is 15,000. Air purifying systems and additional smoke detectors and sprinklers add 3,000 to the cost of any smoking room. Evans Enterprises has 6.3 million available for the building construction. - There will be at least 100 but no more than 180 beach-front rooms. - Design considerations require that the number of lagoon view rooms be at least 1.5 times the number of beach-front rooms, and no more than 2.5 times that number. - Industry trends recommend that the number of smoking rooms be no more than 50% of the number of non-smoking rooms. Required: Develop the linear programming (LP) model to maximize revenue. (DO NOT SOLVE) (10 Marks
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