Question

Round Tree Manor is a hotel that provides two types of rooms with three rental classes: Super Saver, Deluxe, and Business. The profit per night for each type of room and rental class is as follows:

		Rental Class
		Super Saver	Deluxe	Business
Room	Type I (Mountain View)	$35	$40	-
	Type II (Street View)	$25	$35	$45

Round Tree's management makes a forecast of the demand by rental class for each night in the future. A linear programming model developed to maximize profit is used to determine how many reservations to accept for each rental class. The demand forecast for a particular night is 120 rentals in the Super Saver class, 65 in the Deluxe class, and 50 in the Business class. Since these are the forecasted demands, Round Tree will take no more than these amounts of each reservation for each rental class. Round Tree has a limited number of each type of room. There are 100 Type I rooms and 110 Type II rooms.

(a)

Formulate and solve a linear program to determine how many reservations to accept in each rental class and how the reservations should be allocated to room types. If an amount is zero, enter “0”.

Rental Class with room type	No of Reservations
Super Saver rentals allocated to room type I
Super Saver rentals allocated to room type II
Deluxe rentals allocated to room type I
Deluxe rentals allocated to room type II
Business rentals allocated to room type II

(b)

For the solution in part (a), how many reservations can be accommodated in each rental class?

Rental Class	No of Reservations
Super Saver I
Deluxe
Business

Demand for - Select your answer: (I) Deluxe (II) Super Saver (III)Business

(c)

With a little work, an unused office area could be converted to a rental room. If the conversion cost is the same for both types of rooms, would you recommend converting the office to a Type I or a Type II room?

	Type I	Type II
Shadow Price	$	$

Convert an unused office area to - Select your answer: (I) Type I (II)Type -room. Explain

(d)

Could the linear programming model be modified to plan for the allocation of rental demand for the next night?

- Select your answer: (I) Yes (II) No

What information would be needed and how would the model change?

Answer 1