What is the ideal probability of walking a guest


HH is a low-end, all-inclusive resort hotel located near Siete Rios. HH estimates the contribution to profit per room-night is $40 if the room for occupied rooms. However, management is dismayed at the proclivity of its guests to fail to honor their reservations, and is considering establishing an overbooking policy. HH estimates that the penalty to "walk" a guest whose reservation cannot be honored due a lack of space is approximately $100. What is the ideal probability of "walking a guest."?

Request for Solution File

Ask an Expert for Answer!!
Operation Management: What is the ideal probability of walking a guest
Reference No:- TGS086165

Expected delivery within 24 Hours