The Hyatt hotel at Hong Kong is implementing the newsvendor model to determine the booking limit for the low-fair customers and protection level (Q) for the high-fair customers. The total number of rooms in the hotel is $150. Low-fair customers are more price sensitive and tend to reserve rooms well in advance of their stay at a discount reservation fee of $159 per day, which is not refundable if the low- fare customers are no-show. High-fair customers are generally willing to pay $225 for a room because they tend to book much closer to the time of their trip. Two types of uncertainties are involved in the problem: The demand of high-fair custo