In: Advanced Math
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.
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 |
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 |
Variable | Value |
CT | |
CF | |
CS | |
RT | |
RF | |
RS |