Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Stanley Hotel is regarded as one of the spookiest hotels in the U.S. and was the inspiration behind Stephen King's Novel, The Shining. Because

The Stanley Hotel is regarded as one of the spookiest hotels in the U.S. and was the inspiration behind Stephen King's Novel, The Shining. Because of this, it has become a hotspot for tourists and has ample demand at its low-fare price of $329/night. The hotel has a high-fare price for those who book a stay last minute, at $349/night. The hotel finds the last-minute booking requests occur with a normal distribution with a mean of 20 and a standard deviation of 7.

The hotel has a total of 140 rooms that can be booked. The Hotel completed an expense analysis and found that for every occupied room, they incur a cost of $150 in labor expenses, wear and tear, additional utilities used, etc. (This cost does not depend on whether the room is being used by high or low-fare customers and is only incurred when the room is occupied.)

What should the new protection level be for high-fare customers to maximize profits factoring in this new information?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Marketing

Authors: Roger Kerin, Steven Hartley, William Rudelius

16th Edition

1264218753, 978-1264218752

More Books

Students also viewed these General Management questions

Question

What is an influence effect?

Answered: 1 week ago