Managers at the Dew Drop Inn are concerned about the in-creasing number of guests who make reservations but fail toshow up. They have decided to institute a policy of over-booking like larger hotel chains. The profit from a payingguest averages $50 per room per night. The cost of puttingup a guest at another hotel is $100 per room per night.Records show the following number of no-shows over thepast three months:How many rooms should Dew Drop overbook? No-Shows Frequency0 181 362 273 9

Managers at the Dew Drop Inn are concerned about the in-creasing number of guests who make reservations but fail toshow up. They have decided to institute a policy of over-booking like larger hotel chains. The profit from a payingguest averages $50 per room per night. The cost of puttingup a guest at another hotel is $100 per room per night.Records show the following number of no-shows over thepast three months:How many rooms should Dew Drop overbook? No-Shows Frequency0 181 362 273 9

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section: Chapter Questions

Problem 37P

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