Analytical Decision Making

Global Professional
Page 1 of 3
Dr Hassan Elhawary
BUMGT5981 Analytical Decision Making
Assessment Task 4 – Individual report
BUMGT5981 Analytical Decision Making
Trimester Partner Semester
Semester 1 (2207)
Assessment Task 4 – Individual report
This is a group task. It accounts for 30% of your total mark.
This assignment assesses your ability to calculate and interpret data (analytical skills) plus how
this may feed into management plans or strategies (interpretation of analytical results). Take
carful note of the marks allocated for each part as a guide to the effort required to provide a
sufficient answer that part.
Assessment requierments
It is Question – Answer style assignment.
You are expected to supply a professional report as would be expected in the workplace.
10% penalty (reducing the overall mark) will be applied where answers are difficult to
access or identify due to poor presentation related to either stylistic or technical reasons.
Assessment instructions
– Word limit (800-1000 words in total).
– Format is open – you may submit using MS Excel (preferred), MS Word, – or use both (or
other similar software).
– Submit online at the course site. Multiple files are allowed (e.g., MS Excel file and MS
Word file). It is recommended that you use MS Excel exclusively—though take care to make
the final answer to each part obvious to the marker.

Global Professional
Page 2 of 3
Dr Hassan Elhawary
BUMGT5981 Analytical Decision Making
Assessment Task 4 – Individual report
– Mark clearly the question and part attempted.
– Include your name and student ID in the name of the files as well as in the first page of the
files, e.g. Jane Citizen 20212021.
– Pay attention to the weight of parts within questions.
– Penalty will apply for late submission: 10% of the marks for this task for each delay in
submission of a day (weekend included).
Assessment Question
The Endless Point Rest is a popular and friendly family coastal resort. The resort consists of 122
self contained family style units and 24 hour reception. The pricing policy follows a fixed low
rack rate; the same price on every room. This strategy keeps the guest rolling in and makes the
resort the envy of other local accommodation providers as these establishments are rarely more
than half full. The friendly owners of Endless Point Rest, known as Ma and Pa, have a policy of
not charging no shows. As Ma says “if they can’t come then we got no right to take away their
hard earned money and anyway, we want to see them next time.”
Just today, Ma and Pa’s son Emmet has returned home after completing his business degree. He
sits Ma and Pa down.
“Ma and Pa, we don’t have to be losing money – we’re fully booked every night of the year –
and don’t you see that a no show means the room is lost?” Emmet’s eyes light up. “I can do
some calculations and work out a plan – but we need to overbook!”
“I don’t know Emmet” says Pa, “we still got the room for the next night but I can’t build another
one in just a few hours if too many families show up. And that old tent with holes we used to use
for emergencies just aint so popular anymore. ”
“Leave that to me” replies Emmet.
Emmet’s research has profiled no shows based on a year (365 days) of records:
Booking no shows (# rooms) Nights
0 20
1 53
2 65
3 74
4 49
5 36

Global Professional
Page 3 of 3
Dr Hassan Elhawary
BUMGT5981 Analytical Decision Making
Assessment Task 4 – Individual report
6 23
7 15
8 11
9 7
10 6
11 4
12 2
Emmet has estimates that every no show is a loss if $73 per room per night. So he makes a deal
with BillyBob, the manager of Lucky Zest resort. “Billy-Bob, take our walks and we’ll pay the
charge. I know your rack rate is $230 a night – what about we pay you $90 a room per night for
getting our free business? We’ll never walk more than 12 to you any one night.”
Billy-Bob knows a good deal when he hears it. “Ok, covers our variable costs easy – and we
always got rooms – you’ve got a contract.”
Emmet knows the loss from a walk is more than just paying the cost of Billy-Bob’s resort room.
Even though the walked customer will have already paid The Endless Point Rest $97 (for the
unavailable room), Emmet estimates the additional cost (loss of good will, loss of additional
services) to be $110 per walked guest.
Tasks: (Total 100 marks)
1. Calculate the expected opportunity loss per night sustained by The Endless Point Rest.
(15 marks)
2. Calculate the number of rooms to be overbooked by The Endless Point Rest to minimise
the expected loss in the long run (maximum 12 no shows and assume guest length of stay
is one night). What is the expected average gain per night from overbooking? Show all
(30 marks)
3. Apply the critical fractile criterion decision rule to verify your answer to task 2. Does this
confirm or contradict the result for Part 2? Why is this? Explain in plain English what the
critical fractile actually indicates with regard to its interpretation.
(15 marks)
Prepare a 150 words (maximum) script to be used by staff when walking a family (i.e.,
how staff explain to disgruntled families a room is not available). What other measures
may be used or implemented by the Endless Point Rest to support this overbooking
(40 marks)