Otm 300 - Berkshire Manor
Essay by emalamud • June 14, 2016 • Course Note • 466 Words (2 Pages) • 1,046 Views
OTM 300
Berkshire Manor
Demand
Probability
Cumulative Probability
<9
0
0
9
.02
.02
10
.03
.05
11
.03
.08
12
.04
.12
13
.04
.16
14
.05
.21
15
.06
.27
16
.08
.35
17
.09
.44
18
.12
.56
19
.15
.71
20
.14
.85
21
.10
.95
22
.05
1
Above 22
0
1
Cu=560
C0=200
F(Q)= 560/ (560+200)
F(Q)=0.73684211
Therefore, Bonnie and Mac should reserve 20 rooms for high rollers.
A) The gap between the high and low prices increases the risk of understocking rooms and being unable to accommodate high rollers who pay a much higher rate. Berkshire Manor would be leaving a large amount of profit on the table if they can not accommodate high rollers. However, if Berkshire manor restricts too many rooms for high rollers and the the actual demand is not realized the profit of $360 from leisure customers, who usually have higher demand, could be lost completely.
B) As long as Mac is able to make a profit on the rate for the rooms while using a discount he should offer last minute deals. That is, it makes more sense to offer the last minute deal and make some money rather than taking a complete loss on the room. It is also
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