Scenario 16.1 - The Stone Lion
The Stone Lion,a bed and breakfast located in a sleepy town,caters to two groups of customers,young couples interested in something marginally more exotic than a staycation,and corporate clients interested in doing some team-building at a location with no cellular service.Corporations know they can get rooms with minimal notice,but young couples on tight budgets tend to plan well in advance of their planned stay at the property.The corporate rate for rooms is $250 per person and the demand pattern is normal with a mean of 20 and a standard deviation of 10.The proprietor of the Stone Lion takes pity on the young couples and charges them only $150 for identical accommodations.
-If the corporate demand and standard deviation both decrease by 50%,how many rooms should be reserved for corporate clients?

Question

Quizplus · Accepted Answer

The corporate demand and standard deviation both decrease by 50%, so the new mean is 20 * 0.5 = 10 and the new standard deviation is 10 * 0.5 = 5. The number of rooms that should be reserved for corporate clients is then 10 + 5 = 15.

Scenario 16.1 - the Stone Lion