Intercontinental Chicago Magnificent Mile offers numerous rooms. Suppose the Intercontinental Chicago offered rack-rate rooms at...
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Intercontinental Chicago Magnificent Mile offers numerous rooms. Suppose the Intercontinental Chicago offered rack-rate rooms at $400 and discounted rooms at $223. Assume that there are 792 rooms available at the Intercontinental Chicago Magnificent Mile. a. What is the optimal booking limit on discount fare rooms if the Intercontinental Chicago expected 75 rack-rate customers, plus or minus 37 , at one standard deviation? How many rooms would be protected for full-price customers? b. What is the optimal booking limit on discount-price rooms if the Intercontinental Chicago expected 180 rack-rate customers, plus or minus 90 , at one standard deviation? How many rooms would be protected for full-price customers? c. Given this fare structure, is the optimal number of rack-rate rooms protected for the Intercontinental Chicago greater than or less than the anticipated expected rack-rate rooms demanded
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