Vivi open a new hotel there are two type of room Luxury and Economy. ¼ are luxury and ¾ are economy rooms. From research he expects the mean daily occupancy rate for luxury rooms will be 70% with a standard deviation of 8% and the mean daily occupancy for Economy rooms will be 86% with a standard deviation of 5% since the two types of rooms attract very different segment of market there is no relationship between their occupancy rates.
1: Vivi is concerned with the possibility that the total daily occupancy rate for the hotel may fall below 60% if occupancy rates of the two types of rooms are as she expects does she have case to be worried? Please show all the work and answer “yes” or “no” and explain.
2. Vivi builds 200 rooms, 50 luxury and 150 Economy. Her revenue per day from each occupied Luxury room is $120 and from each occupied economy room is $80. If occupancy rates of the types of rooms are as she expected before construction, what is the mean daily revenue from the hotel? What is the Standard deviation of daily revenue?