Sheltering the Homeless

Lucius Riccio

A large municipality has a policy of providing some form of shelter on cold nights to all
homeless people who ask for shelter or who are regarded as in need of help by a social
service professional. This city has set up an adequate, low cost shelter that can hold
10,000 each night. However since on some nights more than 10,000 people will need a
place to stay, the city has contracted with several boarding houses for extra rooms. These
rooms are relatively expensive. They cost $100 per night per person if rented one night at
a time, but only $200 per person total for five consecutive nights if taken for the week (5
nights.) The daily rate is only paid if the room is used. The weekly rate must be paid in
full if taken by the city whether the room is used or not. As such the city has to decide
whether to take a block of rooms for the week, or just take them one at a time as needed,
or some combination of both.

Staff analysts at the Department of Homeless Services estimate that during the coldest
stretches of the winter the number of people needing shelter on any given night can be
estimated by a normal distribution with an average of 10,400 and a standard deviation of
2,000. As such for most cold nights the City’s shelter will be insufficient. On those nights
when more than 10,000 need shelter, the City will need more space.

The coming weeks are expected to be cold, so the Department must decide each week if
it should reserve a block of rooms (and if so how many) or just rent rooms each day as
needed. The City can rent blocks of rooms for the week in the amount of either 500,
1000, 1500, 2000 or none at all. If more rooms are needed beyond that, they will be
rented one day at a time.

For example, if the City decides this week to rent a block of 500 rooms, they must pay at
the beginning of the week $200 times 500 ($100,000) for those 500 rooms whether they
are used or not. If on Monday 10,350 people needed housing, the City would have
enough rooms in this case (10,000 plus the 500 rented) but would have paid for 150
rooms it didn’t use. If the next night 10,732 people needed rooms, all 500 rooms rented
for the week would be used but the City would have to pay $100 each for another 232
rooms ($23,200) for that night. The total cost for the week is the sum of the daily charges
for each of the 5 days plus the one time block rental cost. Calculate a cost for each of the
block of rooms’ options (0, 500, 1000, 1500, 2000.)

Simulate one week (5 days) of demand for a cold spell and determine the least cost
strategy for the City. Simulate 1000 weeks using 123 as the initial random number seed.

Hint: Each day will have its own random number. Evaluate the cost implications of the
demand using the same random number for each of the 5 choices for renting blocks of
rooms. Do that for each of five (5) days and add up the five days worth of costs
associated with each choice to find the least expensive. Think: “Ski Jacket” problem for 5
periods, not just one.
假设 5 种 rental 情况下，计算每一种情形下的 cost，并找到最低的 cost （one-time
和 block）。

我一开始的想法：直接 if statement，看如果所有天都大于 1500 而小于 2000，则 go

for 1500 option。

Not number of time you chose 1500 over 2000 but the least mean
-> because you are making a decision upfront and have to stick to it