Description

Purpose
This assignment task is aligned to the learning outcomes GLO1 & ULO1 and skills GLO3 & ULO2, GLO4 & ULO3.
You will be required to conceptualise, formulate, and represent a real-life business scenario as a
spreadsheetbased decision model that allows the decision-maker to experiment with different decision inputs,
investigate the sensitivity of the outcomes, and risk analysis based on simulation modelling.

Case Context
You are required to develop a spreadsheet‐based decision model that can be used to investigate and explore
decisions and risks relating to hotel booking management. The model should be designed to be used by the
Hotel Sales Manager for accommodation reservation bookings made by customers for the coming high season.
The developed decision model will be used for the objective of maximising the daily occupancy rate during the
high season to maximise daily profits.

You should assume the following:

• The number of available rooms is limited
• Cancellations are to be expected
• The hotel's overbooking policy - pay an amount equivalent to what customers would have paid for one
night at the hotel
• Some limit on the number of possible reservations is expected (to handle overbooking)
• Guests can arrive at any time of the day or night so the policy would be to accept walk-ins (i.e., with no
prior booking) as long as it is within the over-booking limit
• The model only applies to one type of room, and
• Any other valid assumptions are left to your discretion.

You are required to create a fictitious client (i.e., the Hotel Sales Manager) and demonstrate the utility of the
decision model using real data where available (such as the price of a room during high season) and create data
where it is not. The decision model must be realistic and easy to use. The level of complexity modelled, for
example, the choice of deterministic vs. stochastic inputs, input distributions, etc., is left to your discretion.
However, the model must enable the user to input the business costs such as maintenance costs, overbooking
costs, etc., and revenues in order to maximise profit.

Excel spreadsheet _Assignment_2 includes a sample of the decision model format for you to follow. The
minimum requirements of the decision model are:
1. The ability to enter revenue and costs, so that decision options can be explored and to enable outputs,
such as profit, to be calculated.
2. Stochastic treatment of random inputs, in order to explore the resulting simulated output and to
summarise the risks.
3. It must also enable the decision-maker to explore and understand the risks associated with the decision.
Specific Requirements
This is an individual assignment. The modelling work should be submitted online in the Assignment Folder as a
single MS Excel file with the required information in clearly labelled separate worksheets. In addition, you are
also required to submit a report that summarises your models and results in an MS Word file. Any other file
format, such as pdf, is NOT acceptable and will not be marked. In summary, two files should be submitted – one
MS Excel spreadsheet and one MS Word file.

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Your submission will be assessed across the following six sections. The requirements of each section are detailed
below.
Section 1: Model description, conceptual model, and assumptions (File: MS Word; 5 marks)
• Provide a brief overview of the model
• Include a conceptual model
• Note any relevant assumptions

Section 2: Spreadsheet-based decision model (File: MS Excel; 5 marks)

Design a spreadsheet model that you can use to investigate the problem.
The model should include the following:
• Fixed inputs e.g. Daily cleaning cost per room
• Stochastic inputs e.g. Number of late cancellations
• Decision variables o Price per room
o Overbooking %
o Refund policy e.g. no-show fee, and the late cancellation fee
• Calculated variables e.g. Total cost per day
• Output variable(s) e.g. Daily profit

Section 3: Scenario analysis (File: MS Excel; 5 marks)

This section relates to Topic 7. Consider different scenarios for each stochastic input and examine the impact on
the outputs. Also, consider the sensitivity of the outputs to each of the decision variables.

Section 4: Stochastic modelling including choice of distributions (File: MS Excel; 5 marks)

This section relates to Topics 8 and 9. Undertake stochastic modelling where each of the stochastic inputs is
now random. This will require you to choose an appropriate distribution for each of the stochastic inputs and
justify each one. Part of the justification required will come from examining the descriptive statistics of each
stochastic input.

Section 5: Simulated output distribution and risk analysis report (File: MS Excel; 5 marks)
This section relates to Topic 9. This requires you to examine the simulated distributions for each output (only
need to see convergence for outputs), and undertake a risk analysis based on simulation modelling, in order to
quantify the risks associated with the problem.

Section 6: Overall presentation (File: MS Word; 15 marks)

Your MS Word document should be a standalone document containing no more than 1500 words. It should
include:
• A brief description of the model (maximum 100 words).
• The conceptual model and assumptions behind the decision model.
• The decision model copied from the spreadsheet.
• The best- and worst-case scenarios for the data provided, and a discussion of the consequences.
• Justification for the choice of distributions.
• Risk analysis report based on the simulation modelling.
ULO3 Interpret and analyse the results; investigate the GLO4: Critical thinking: evaluating information using
assumptions of the decision model. critical and analytical thinking and judgment

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Rubric for Assignment 2
Performance Levels YET TO ACHIEVE MINIMUM STANDARD MEETS STANDARD EXCEEDS STANDARD
Criteria Poor (0-49) Satisfactory (50-59) Good (60-69) Very good (70-79) Excellent (80-100) Format
Report: Model 0 1.5 2.5 3 3.5 5
description,
conceptual Conceptual model is A vague conceptual An appropriate conceptual A clear conceptual model is given. A very clear conceptual model is A very clear conceptual model is given. All
inappropriate or not model is given, with model is given. Relationships Relationships are mostly correctly given. All components are components are modelled correctly in a MS Word
model, and
assumptions clearly outlined several modelling errors are mostly correctly specified specified modelled correctly in a clear way clear and innovative fashion
ULO1/GLO1,4 0 - 1.4 Marks 1.5 - 2.4 Marks 2.5 – 2.9 Marks 3.0 – 3.4 Marks 3.5 – 3.9 Marks 4 – 5 Marks
Total: 5 marks
0 1.5 2.5 3 3.5 5
Spreadsheet-based Decision model Decision model is Decision model is Decision model is complete. All Decision model is complete. Decision model is complete. All Excel
decision model remains complete. All complete. Some stochastic stochastic inputs display All stochastic inputs display stochastic inputs display appropriate spreadsheet
ULO1,3/GLO1,4 incomplete with stochastic inputs can inputs can only display appropriate random values. appropriate random values. random values. All formulas in the
Total: 5 marks some formulas or only display averages averages There are errors in the fixed Only errors are in some model are correct
values missing inputs or calculated values formulas for outputs
0 - 1.4 Marks 1.5 - 2.4 Marks 2.5 – 2.9 Marks 3.0 – 3.4 Marks 3.5 – 3.9 Marks 4 – 5 Marks
0 1.5 2.5 Most of 3 Most of the 3.5 5
Scenario Some possible scenario the important scenarios important scenarios are All of the main scenarios are All scenarios are considered, fully Excel
analysis reports analyses are presented, are considered for the considered for the analysis and considered, justified in a clear way, justified in a clear way, and presented in spreadsheet
Scenario analysis are not included but not presented analysis elaboration on them is presented and presented in a compelling a compelling fashion
ULO1,3/GLO1,4 or are clearly clearly fashion
Total: 5 marks inappropriate

0 - 1.4 Marks 1.5 - 2.4 Marks 2.5 – 2.9 Marks 3.0 – 3.4 Marks 3.5 – 3.9 Marks 4 – 5 Marks
Stochastic modelling 0 1.5 2.5 3 3.5 5 Excel
including choice of Stochastic Stochastic modelling is Some effective stochastic Some effective stochastic Stochastic modelling is used Stochastic modelling is used effectively. spreadsheet
distributions modelling not poorly implemented modelling is used with modelling is used with some effectively. Choice of distributions Choice of distributions is fully justified
ULO1,3/GLO1,4 included or and analysed poor choice of elaboration on distributions is justified
Total: 5 marks inappropriate distributions
1.5 - 2.4 Marks 3.0 – 3.4 Marks 3.5 – 3.9 Marks 4 – 5 Marks
0 - 1.4 Marks 2.5 – 2.9 Marks
0 1.5 2.5 3 Reasonabl 3.5 5
Simulated output Unclear simulation Some analysis of e analysis of simulation outputs Clear and reasonable analysis of Clear and comprehensive analysis of Excel
Simulated output and risk analysis outputs are simulation output is is presented. It considers some simulation output. A simulation output is provided with spreadsheet
distribution and risk are not included or presented. Unclear presented. It considers of the main stochastic inputs, comprehensive consideration comprehensive consideration of the
analysis report are inappropriate analysis of the effect some relevant stochastic with some discussion of their of the main stochastic inputs, main stochastic inputs, and discussion
ULO1,3/GLO1,4 of input risks inputs, with some effect on output with some discussion of their of their effect on output
Total: 5 marks discussion of their effect 3.0 – 3.4 Marks effect on output
0 - 1.4 Marks on output 3.5 – 3.9 Marks 4 – 5 Marks
1.5 - 2.4 Marks 2.5 – 2.9 Marks
 0 4.5 Report 7.5 9 Report 10.5 15
Report is not is not a standalone Report is largely a standalone is a completely Report is a Report is a completely standalone
included or is document, requiring document, though may standalone document. completely document.
Report: Overall inappropriate review of require a review of the A clear and logical report is standalone A clear and logical report is provided
presentation spreadsheet to spreadsheet to help provided across all areas, where document. across all areas, where results of
ULO3/GLO4 understand results understand some points. results of analysis have been A clear and logical report is analysis have been examined,
Total: 15 marks on which report is Some areas lack clarity or satisfactorily examined and provided across all areas, interpreted and described accurately,
based. Displays a logic in interpretation or accurately interpreted. where results of analysis have precisely and concisely. Report MS Word
general lack of clarity analysis of results, or there Some areas of the report display a been examined, interpreted displays understanding across all
or logic in are a few errors or omissions lack of depth in understanding and described accurately, areas.
interpretation or precisely and concisely. Report Report concludes with some key insights
0 - 4.4 Marks analysis of results 9 – 10.4 Marks displays a understanding
4.5 - 7.4 Marks 7.5 – 8.9 Marks across all areas 12 – 15 Marks

10.5 – 11.9 Marks

Total marks 40 (30%)
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