1. Calculate the expected opportunity loss per night sustained by The Endless Point Rest.
2. Calculate the number of rooms to be overbooked by The Endless Point Rest to minimise the expected loss in the long run (maximum 12 no shows and assume guest length of stay is one night). What is the expected average gain per night from overbooking? Show all workings.
3. Apply the critical fractile criterion decision rule to verify your answer to task 2. Does this confirm or contradict the result for Part 2? Why is this? Explain in plain English what the critical fractile actually indicates with regard to its interpretation.
4. Prepare a 50 word (maximum) script to be used by staff when walking a family (i.e., how staff explain to disgruntled families a room is not available). What other measures may be used or implemented by the Endless Point Rest to support this overbooking strategy?

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Posted on May 16, 2016Author TutorCategories Question, Questions