4 Marks Question 5 The Bloomberg Resort rents weekly Guest Houses by the Bali sh

Question

4 Marks Question 5 The Bloomberg Resort rents weekly Guest Houses by the Bali shore. These Guest Houses rent for $1500 per week, and guest typically spend another $500 as profit to the firm during their stay. If no Guest House is available for a customer with reservation, he has to be transported to another Guest House, and Bloomberg picks up the cost of the other Guest House S750 per week plus $200 as transportation charge. No-shows by customers' average three a week, evenly distributed between 0 and 6. How many Guest Houses should Bloomberg overbook?

Explanation / Answer

According to the question :

1500$ per week for Bloomberg resort at Bali shore

500$ usually spent extra by guests

750$ for other guest house +200$ as transportation

No show average is 3 I. E atleast 3 people miss their booking and don't visit on time or on that day to that location due to which cab and hotel remains unused for that day and the company needs to pay for the same..

If we take that average is 3 per week are always no show and usually it's between 0-6 so average is 3 as mentioned in query so what we can do is we can overbook min. 2 rooms on an average as our average is 3 so if we book 6 rooms 3 and there are sometimes chances that 3 are no show so we will only need 3 but sometimes if we need 5 rooms then again take average of 3 two are required so according to the situation we can take min two rooms as overbooked so that if there will be no show it will have less impact and if we need more and there is no no show then it can be booked at that time only , so 2 room can be overbooked

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