Problem:
HotelSurf has 100 rooms. For regular-fare customers, rooms are priced at $400 per night. For premium-fare customers, who generally arrive at the last minute, rooms are priced at $800 per night. The demand for premium-fare customers is distributed normally with a mean of 40 and a standard deviation of 20. Assume that there is ample demand for premium-fare customers. What should the protection level for the premium fare be to maximize expected profit?
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