Reference no: EM133232994
Assignment:
As a hotel manager, you are involved in a major renovation of a hotel that will have space for 100 standard hotel rooms. You are wondering whether some of that space should be used for luxury suite rooms, each of which would be twice the size of a standard room.
For example, you could plan for 20 suites, in which case you would have remaining space for 60 standard rooms (100 - 2*20 = 60). Your overall construction costs won't be impacted by this decision, because a suite costs about twice as much to build as a normal hotel room.
Room charges are predicted to be $99/night and $169/night for standard and luxury rooms, respectively.
Anticipated demand for...
Standard rooms - mean of 50, standard deviation of 10
. Luxury suites - mean of 20, standard deviation of 10
Occupied rooms incur the following utilities cost :
. Standard rooms - $12.50
. Luxury suites - $25
You estimate fixed costs to be $6000 per night
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