SMBD Solutions
Smbd – Assignment 4
Submitted to Prof. Ishwar Murthy
1 Introduction
Mr. Debashish Chatterjee, owner of hotel Aria, is working on room booking policy to maximize the revenues. And specifically, he is working on the weekend operations in which the number of bookings are maximum. There are two types of bookings, Class I – One day bookings which start from SAT noon to SUN noon or SUN noon to MON noon and Class II – Two day bookings which start from SAT noon to SUN noon. The tariff of Class I booking is Rs 5000/- while that of Class II is Rs 7500/-.
The current booking policy is based on first-come-first serve. So, for example, if all the bookings are for Class I for SUN, the hotel gives all the available rooms to all such Class I buyers. In this case the hotel will miss the Class II customers. Though the tariff for Class II customer per night is lesser, there is a benefit of revenue being certain. Thus there is a trade – off between certain revenue & lesser revenue. So, there is a need to make a suitable reservation policy which maximizes the revenue.
2 Reservation Policy A – Reservation in both the classes
We decided to have reservation limits in both the classes. With varying reservation limits, we computed the optimal reservation limit using the concept of DATA TABLE. The optimal reservation limits came out to be:
Class I
Class II
The optimal revenue came out to be Rs.
Approach: We calculated the number of requests for all the classes on each day using the RISK Poisson function. This is used to find the availability of rooms on each day. So, if I say that the reservation limit for Class I is 10, then the maximum booking that can be done in Class I is 10. This also implies that the maximum booking in Class II is 10. So, the decision rule to book a room is to take minimum of the demand and availability of room on that day. For different combinations of reservation limits, we calculated the expected revenue.
Submitted to Prof. Ishwar Murthy
1 Introduction
Mr. Debashish Chatterjee, owner of hotel Aria, is working on room booking policy to maximize the revenues. And specifically, he is working on the weekend operations in which the number of bookings are maximum. There are two types of bookings, Class I – One day bookings which start from SAT noon to SUN noon or SUN noon to MON noon and Class II – Two day bookings which start from SAT noon to SUN noon. The tariff of Class I booking is Rs 5000/- while that of Class II is Rs 7500/-.
The current booking policy is based on first-come-first serve. So, for example, if all the bookings are for Class I for SUN, the hotel gives all the available rooms to all such Class I buyers. In this case the hotel will miss the Class II customers. Though the tariff for Class II customer per night is lesser, there is a benefit of revenue being certain. Thus there is a trade – off between certain revenue & lesser revenue. So, there is a need to make a suitable reservation policy which maximizes the revenue.
2 Reservation Policy A – Reservation in both the classes
We decided to have reservation limits in both the classes. With varying reservation limits, we computed the optimal reservation limit using the concept of DATA TABLE. The optimal reservation limits came out to be:
Class I
Class II
The optimal revenue came out to be Rs.
Approach: We calculated the number of requests for all the classes on each day using the RISK Poisson function. This is used to find the availability of rooms on each day. So, if I say that the reservation limit for Class I is 10, then the maximum booking that can be done in Class I is 10. This also implies that the maximum booking in Class II is 10. So, the decision rule to book a room is to take minimum of the demand and availability of room on that day. For different combinations of reservation limits, we calculated the expected revenue.