Question
Acme Parking Garage charges cars a flat fee of $10 for parking any duration, in addition to a variable prorated rate of $5 per hour
Acme Parking Garage charges cars a flat fee of $10 for parking any duration, in addition to a variable prorated rate of $5 per hour (as an example, a car staying 1.5 hours would be charged $17.50). Suppose the total throughput λ is measured in units of cars per hour, and INV is the average number of cars in the garage.
Suppose the total customer base remains the same as before (i.e., λ is still the total throughput) but now 30% of all customers opt for the valet service.
b. Write the average hourly profit function (which excludes fixed costs, such as over- head and rent) as a function of λ and/or INVhourly and/or INVvalet (where INVhourly and INVvalet are the average number of hourly and valet cars parked in the garage, respectively.)
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