Lec 14 - Monday, October 25, 2010 Notes Team #1 Isa Cruz,...

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Unformatted text preview: Monday, October 25, 2010 Notes Team #1 Isa Cruz, Huan Guo, Katie Ramp, Michelle Leahy, Alli Zheng Hotel reservations re-cap: Important points Different people are willing to pay different prices. To increase profits, reserve rooms for those willing to pay higher prices. Prob( y g3410 D) = g3004g3048 g3004g3048g2878g3004g3042 Reserve Y for customers willing to pay the full price, Pf = $225 Reserve D for customer willing to pay the discount price, Pd = $159 Example barb2right Pf = $500 Pd = $200 400 rooms P( X = x) = g1857 g2879g3090 g3090 g3299 g3051! (poisson) EX = 105 (mean) Excel will do the calculations, looking similar to… = poisson(A 1 , 105, TRUE) = g3017g3033g2879g3017g3031 g3017g3033g2879g3017g3031g2878g3017g3031 = g3017g3033g2879g3017g3031 g3017g3033 = 0.6 (mean of demand) (take cumulative distribution) answer will be approximately 107 When working with a large mean, approximate with the Normal distribution for easier computation… Prob( y g3410 D) = P(( y-µ)/ σ g3410 (D-µ)/ σ ) = 0.6, as before in the Poisson case z Z A 1 1 2 3 … 200 Use the normal table to find z = 0.25 = (y-µ)/Use the normal table to find z = 0....
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Lec 14 - Monday, October 25, 2010 Notes Team #1 Isa Cruz,...

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