Question

maximum profit @perl

Answer 1

Consultant Air focuses business on high-paying McKinsey consultants, but to fill planes, it also carries the general public. It is flying a 100-seat jet from Atlanta to San Francisco and the consultant demand is normally distributed with mean 60 and standard deviation 10. Consultants pay $1,200 per ticket, the general public pays $150. Of course, the general public must book a flight several weeks ahead of time, while the consultants book flights at the last minute.

How many seats should be opened up for the general public? On average, assuming 0 no-shows, how full will the plane be under this plan?

Answer 2

\(\bar{x} = 60 \)
\(s = 10 \)
\(\sigma^2 = 100 \)

Answer 3

I was thinking at looking at the values between 50-70, which accounts for the deviation of demand with consultants, and see the difference in profit margin.

Answer 4

openstudy lagged out :/
This is a nice problem, is there a problem similar to it that I can look at. i was thinking to use expected value

Answer 5

i will be back to comment, thinking about problem..

Answer 6

a simpler one

Chez Rogat
Rene was adamant. “If we have to tell customers we overbooked and there’s no seating available, they are going to be extremely angry. I’ll bet it costs us $150 per couple in goodwill each time.” Tom replied, “No way, it doesn’t cost us a penny. We’re so popular now it doesn’t matter if one potential customer doesn’t come back. What matters is getting the most profit out of each seating. We prep everything ahead of time, so it costs us $50 per couple for food whether they show up or not, and we charge $150 per couple. At that rate of profit I don’t want to see a single empty table.”
The restaurant Chez Rogat was run by two Owen grads. They had two seatings each night, 6:00 P.M. and 8:30 P.M., for their 30-table restaurant. They prepared the same meal for everyone at each seating. Due to their popularity, they always had more reservations than they could handle and reservations were made far in advance. They had few no-shows, but did have some. They had about an equal chance of either 0, 1, 2, or 3 couples as no-shows at any given seating.
Given their costs, calculate an overbooking policy for Chez Rogat. Would you recommend any other capacity management strategy?

Answer 7

All I see is a block of text that makes my head spin a bit. I am just not in the mindset to concentrate like this I think haha.