Question

In: Advanced Math

Hanson Inn is a 96-room hotel located near the airport and convention center in Louisville, Kentucky....

Hanson Inn is a 96-room hotel located near the airport and convention center in Louisville, Kentucky. When a convention or a special event is in town, Hanson increases its normal room rates and takes reservations based on a revenue management system. The Classic Corvette Owners Association scheduled its annual convention in Louisville for the first weekend in June. Hanson Inn agreed to make at least 50% of its rooms available for convention attendees at a special convention rate in order to be listed as a recommended hotel for the convention. Although the majority of attendees at the annual meeting typically request a Friday and Saturday two-night package, some attendees may select a Friday night only or a Saturday night only reservation. Customers not attending the convention may also request a Friday and Saturday two-night package, or make a Friday night only or Saturday night only reservation. Thus, six types of reservations are possible: convention customers/two-night package; convention customers/Friday night only; convention customers/Saturday night only; regular customers/two-night package; regular customers/Friday night only; and regular customers/Saturday night only.

The cost for each type of reservation is shown here:

Two-Night
Package
Friday Night
Only
Saturday Night
Only
Convention $225 $123 $130
Regular $295 $146 $152

The anticipated demand for each type of reservation is as follows:

Two-Night
Package
Friday Night
Only
Saturday Night
Only
Convention 40 20 15
Regular 20 30 25

Hanson Inn would like to determine how many rooms to make available for each type of reservation in order to maximize total revenue.

  1. Define the decision variables and state the objective function. Round your answers to the nearest whole number.
    Let CT = number of convention two-night rooms
    CF = number of convention Friday only rooms
    CS = number of convention Saturday only rooms
    RT = number of regular two-night rooms
    RF = number of regular Friday only rooms
    RS = number of regular Saturday only room
    CT + CF + CS + RT + RF + RS
  2. Formulate a linear programming model for this revenue management application. Round your answers to the nearest whole number. If the constant is "1" it must be entered in the box.
    CT + CF + CS + RT + RF + RS
    S.T.
    1) CT
    2) CF
    3) CS
    4) RT
    5) RF
    6) RS
    7) CT + CF
    8) CT + CS
    9) CT + CF + RT + RF
    10) CT + CS + RT + RS
    11) CT, CF, CS, RT, RF, RS 0
  3. What are the optimal allocation and the anticipated total revenue? Round your answers to the nearest whole number.
    Variable Value
    CT
    CF
    CS
    RT
    RF
    RS

    Total Revenue = $  
  4. Suppose that one week before the convention the number of regular customers/Saturday night only rooms that were made available sell out. If another nonconvention customer calls and requests a Saturday night only room, what is the value of accepting this additional reservation? Round your answer to the nearest dollar.

    The dual value for constraint 10 shows an added profit of $   if this additional reservation is accepted.

Solutions

Expert Solution


Related Solutions

Hanson Inn is a 96-room hotel located near the airport and convention center in Louisville, Kentucky....
Hanson Inn is a 96-room hotel located near the airport and convention center in Louisville, Kentucky. When a convention or a special event is in town, Hanson increases its normal room rates and takes reservations based on a revenue management system. The Classic Corvette Owners Association scheduled its annual convention in Louisville for the first weekend in June. Hanson Inn agreed to make at least 50% of its rooms available for convention attendees at a special convention rate in order...
The Inn at Prescott Ranch is a small, boutique hotel located in Prescott, Arizona. It opened...
The Inn at Prescott Ranch is a small, boutique hotel located in Prescott, Arizona. It opened in 1998. The Inn has identified the main competition as the Prescott Resort, owned and operated by the Yavapai Nation, and the Hassayampa Inn, a historic hotel in downtown Prescott, adjacent to Whiskey Row. The Inn has 65 rooms on two floors—each with a private balcony. The nightly room rates are the highest in Prescott. The Inn offers a full array of amenities—both in...
The small group gathered in a conference room at a Red Roof Inn near Pittsburgh had...
The small group gathered in a conference room at a Red Roof Inn near Pittsburgh had a common bond and an unusual goal. They all worked for restaurants in the Red Lobster chain. Now they had to figure out whether a Red Lobster waitress had been unjustly fired. The panel included a general manager, an assistant manager, a server, a hostess and a bartender, all of whom had volunteered to review circumstances of the firing and had been told simply...
Marketing assignment The Inn at Prescott Ranch is a small, boutique hotel located in Prescott, Arizona....
Marketing assignment The Inn at Prescott Ranch is a small, boutique hotel located in Prescott, Arizona. It opened in 1998. The Inn has identified the main competition as the Prescott Resort, owned and operated by the Yavapai Nation, and the Hassayampa Inn, a historic hotel in downtown Prescott, adjacent to Whiskey Row. The Inn has 65 rooms on two floors—each with a private balcony. The nightly room rates are the highest in Prescott. The Inn offers a full array of...
Located near a national park on the Yarra River, Colbee Hotel was built in 1915 by...
Located near a national park on the Yarra River, Colbee Hotel was built in 1915 by the Top End Railway. In an effort to supplement its lodging revenue, the hotel decided in 2012 to begin manufacturing and selling small wooden canoes decorated with symbols hand-painted by local indigenous Australians. Due to the great success of the canoes, the hotel began manufacturing and selling paddles as well in 2015. Many hotel guests purchase a canoe and paddles for use in self-guided...
4. Assume you own and operate a hotel near a busy international airport. Your property caters...
4. Assume you own and operate a hotel near a busy international airport. Your property caters directly to business travelers. Assume also that your historical records indicate a complete room’s sell­out every Tuesday and Wednesday night for the past six months. Your hotel’s director of sales (DOS) informs you that she forecasts Tuesday and Wednesday night sell­outs for the coming six months as well. What does that information tell you about business traveler’s willingness to purchase rooms on those specific...
Wildhorse provides shuttle service between four hotels near a medical center and an international airport. Wildhorse...
Wildhorse provides shuttle service between four hotels near a medical center and an international airport. Wildhorse uses two 10-passenger vans to offer 12 round trips per day. A recent month’s activity in the form of a cost-volume-profit income statement is shown below. Sales (1,500 passengers) $33,000 Variable costs     Fuel $4,250     Tolls and parking 3,274     Maintenance 726 8,250 Contribution margin 24,750 Fixed costs     Salaries 13,500     Depreciation 2,000     Insurance 1,000 16,500 Net income $8,250 Calculate the break-even point in dollars. Break-even point...
Sheridan provides shuttle service between four hotels near a medical center and an international airport. Sheridan...
Sheridan provides shuttle service between four hotels near a medical center and an international airport. Sheridan uses two 10-passenger vans to offer 12 round trips per day. A recent month’s activity in the form of a cost-volume-profit income statement is shown below. Sales (1,470 passengers) $41,160 Variable costs Fuel $5,762 Tolls and parking 3,544 Maintenance 984 10,290 Contribution margin 30,870 Fixed costs Salaries 13,100 Depreciation 1,400 Insurance 1,250 15,750 Net income $15,120 (a1) Calculate the break-even point in dollars. Break-even...
Spencer Kars provides shuttle service between four hotels near a medical center and an international airport....
Spencer Kars provides shuttle service between four hotels near a medical center and an international airport. Spencer Kars uses two 10-passenger vans to offer 12 round trips per day. A recent month’s activity in the form of a cost-volume-profit income statement is shown below. Fare revenues ( 1,500 fares) $ 34,500 Variable costs     Fuel $ 5,603     Tolls and parking 3,446     Maintenance 956 10,005 Contribution margin 24,495 Fixed costs     Salaries 13,100     Depreciation 1,500     Insurance 1,517 16,117 Net income $ 8,378 A....
Add a new product: Mac’s juice center, located near the university, serves as a gathering place...
Add a new product: Mac’s juice center, located near the university, serves as a gathering place for the university’s students. It sells orange juice at a contribution of $0.60 per bottle. Mac is considering selling sandwiches. He analyzed the following costs of adding sandwiches: Per month Per Sandwich Monthly fixed costs: Variable expenses: Wages of cook $ 1,200 Bread $0.20 Other $   300 Vegetables $0.60 Total $ 1,500 Total $0.80 Mac planned a selling price of $1.20 per sandwich to...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT