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# (Solved): The Hyatt hotel at Hong Kong is implementing the newsvendor model to determine the booking limit for ...

The Hyatt hotel at Hong Kong is implementing the newsvendor model to determine the booking limit for the low-fair customers and protection level (Q) for the high-fair customers. The total number of rooms in the hotel is \$150. Low-fair customers are more price sensitive and tend to reserve rooms well in advance of their stay at a discount reservation fee of \$159 per day, which is not refundable if the low- fare customers are no-show. High-fair customers are generally willing to pay \$225 for a room because they tend to book much closer to the time of their trip. Two types of uncertainties are involved in the problem: The demand of high-fair customers (????ℎ????????ℎ) is uncertain and it follows the following distribution: Q Probability of (????ℎ????????ℎ <= ????) Q Probability of (????ℎ????????ℎ <= ????) Q Probability of (????ℎ????????ℎ <= ????) 10 0.0001 20 0.0920 30 0.7365 11 0.0004 21 0.1314 31 0.7927 12 0.0009 22 0.1802 32 0.8406 13 0.0019 23 0.2381 33 0.8803 14 0.0039 24 0.2640 34 0.9121 15 0.0077 25 0.2811 35 0.9370 16 0.0140 26 0.2945 36 0.9558 17 0.0242 27 0.4280 37 0.9697 18 0.0396 28 0.5525 38 0.9797 19 0.0618 29 0.6226 39 0.9999

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