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Round Tree Manor is a hotel that provides two types of rooms with three rental classes: Super Saver, Deluxe, and Business. The profit per night for each type of room and rental class is as follows:
Type I rooms do not have wireless Internet access and are not available for the Business rental class. Round Tree's management makes a forecast of the demand by rental class for each night in the future.
A linear programming model developed to maximize profit is used to determine how many reservations to accept for each rental class.
The demand forecast for a particular night is 150 rentals in the Super Saver class, 55 rentals in the Deluxe class, and 40 rentals in the Business class. Round Tree has 100 Type I rooms and 110 Type II rooms
With a little work, an unused office area could be converted to a rental room. If the conversion cost is the same for both types of rooms, would you recommend converting the office to a Type I or a Type II room?
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