What is the optimal protection level for the full fare

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Reference no: EM131138045

(Park Hyatt) Consider the example of the Park Hyatt Philadephia discussed in the text. Recall that the full fare is $225, the expected full-fare demand is poison with mean 27.3, the discounted fare is $159 and there are 118 king/queen rooms. Now suppose the cost of an occupied room is $45/night. That cost includes the labor associated with prepping and cleaning a room, the additional utility use. Suppose the Park Hyatt wishes to maximize expected profit larger than expected revenue. What is the optimal protection level for the full fare?

Reference no: EM131138045

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