A Hotel Manager Must Decide How Many Rooms to Overbook

question 13

Multiple Choice

A hotel manager must decide how many rooms to overbook. Room rates are $125 per night and each room costs $45 to maintain. A bumped customer is sent to another hotel at a cost of $75. Given the distribution of no-shows below, how many rooms should the manager overbook?

• A) 9 rooms.
• B) 10 rooms.
• C) 11 rooms.
• D) 12 rooms.

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Definitions:

Broadband Pay Structure

A compensation system that consolidates a large number of pay grades into fewer broad bands, offering flexibility in managing employee salaries.

Fixed Interval Promotion

A promotional strategy where employees are moved up to a higher position or salary grade after a specific, preset period.

Pay Policy Line

A guideline that establishes pay rates for various job positions within an organization, aligning them with market rates and internal valuations.

Regression Analysis

A statistical method used to study the relationship between a dependent variable and one or more independent variables.