Southeastern Airlines's daily flight from Atlanta to Charlotte uses a Boeing 737, with all-coach seating for 120 people. In the past, the airline has priced every seat at $142 for the one-way flight. An average of 79 passengers are on each flight. The variable cost of a filled seat is $26. Aysajan Eziz, the new operations manager,has decided to try a yield revenue approach, with seats priced at $82 for early bookings and at $187 for bookings within 1 week of the flight. He estimates that the airline will sell 67 seats at the lower price and 34 at the higher price. Variable cost will not change.Total S contribution in the single price approach is $(enter your response as a whole number).Total S contribution in the two price points approach is $(enter your response as a whole number).Which approach is preferable to Mr. Eziz?O A. Proposed model - two price pointsO B. Current model - single price

Given data; Single price approach Two price point approach Seating capacity 120 120 Passengers…

Answered: Southeastern Airlines's daily flight…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter12: Queueing Models

Section: Chapter Questions

Problem 59P

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Southeastern Airlines's daily flight from Atlanta to Charlotte uses a Boeing 737, with all-coach seating for 120 people. In the past, the airline has priced every seat at $136 for the one-way flight. An average of 78 passengers are on each flight. The variable cost of a filled seat is $22. Aysajan Eziz, the new operations manager, has decided to try a yield revenue approach, with seats priced at $79 for early bookings and at $186 for bookings within 1 week of the flight. He estimates that the airline will sell 63 seats at the lower price and 36 at the higher price. Variable cost will not change. Total $ contribution in the single price approach is $ (enter your response as a whole number).
Southeastern Airlines's daily flight from Atlanta to Charlotte uses a Boeing 737, with all-coach seating for 120 people. In the past, the airline has priced every seat at $136 for the one-way flight. An average of 78 passengers are on each flight. The variable cost of a filled seat is $22. Aysajan Eziz, the new operations manager, has decided to try a yield revenue approach, with seats priced at $79 for early bookings and at $186 for bookings within 1 week of the flight. He estimates that the airline will sell 63 seats at the lower price and 36 at the higher price. Variable cost will not change. Total $ contribution in the single price approach is $ 8892 (enter your response as a whole number). Total $ contribution in the two price points approach is $ 11910 (enter your response as a whole number).
Southeastern Airlines's daily flight from Atlanta to Charlotte uses a Boeing 737, with all-coach seating for 120 people. In the past, the airline has priced every seat at $136 for the one-way flight. An average of 81 passengers are on each flight. The variable cost of a filled seat is $23. Aysajan Eziz, the new operations manager, has decided to try a yield revenue approach, with seats priced at $82 for early bookings and at $195 or bookings within 1 week of the flight. He estimates that the airline will sell 66 seats at the lower price and 33 at the higher price. Variable cost will not change. 1. Total $ contribution in the single price approach is ? (enter your response as a whole number). 2. Total $ contribution in the two price points approach is ? (enter your response as a whole number). 3.Which approach is preferable to Mr. Eziz? A.Proposed model−two price points OR B. Current Model - Single price
Majestic Corporation provides call-center ordering services for Essential Oils magazine. Majestic receives an annual fee of $200,000 for providing such services and is also eligible to receive a performance bonus up to $65,000 if the average customer wait times are below certain thresholds at the end of the year. Using historical results as well as current expectations, Majestic estimates the chances of achieving the different performance bonuses as shown in the table here. Assume there are NO revenue constraints, and the entity uses the expected value approach to record variable consideration when recognizing revenue during the period. Which is the amount of the performance bonus management can recognize in the transaction price? Average wait times Performance Bonus % Chance of Achieving $65,000 15% < 1 minute < 2 minutes < 3 minutes < 4 minutes < 5 minutes $45,000 $25,000 $5,000 0 10% 50% 20% 5% a. Management would include the variable consideration in the transaction price in the…
Winchester Hospital is a privately owned institution. The hospital is at full capacity, but the governing board would like to see an increase in revenue. They’ve tasked you, the hospital administrator, with finding ways to accomplish this. If you are able to raise revenue, the board will provide you with a significant year-end bonus. Currently, 50% of Winchester’s rooms can be converted from having one bed to having two beds, allowing for more patients to be admitted. Doctors, nurses, and other hospital staff are firmly against this move, especially because additional hiring is not planned. These stakeholders make up the vast majority of the hospital workforce. Evaluate this situation using both the utilitarianism and individualistic (ethical egoism) approaches. Define each approach and describe how each would resolve the decision. What would you expect the outcome of each decision to be? Support your conclusions with facts from the situation.
Southeastern Airlines's daily flight from Atlanta toCharlotte uses a Boeing 737, with all-coach seating for 120 people.In the past, the airline has priced every seat at $140 for theone-way flight. An average of 80 passengers are on each flight.The variable cost of a filled seat is $25. Aysajan Eziz, the newoperations manager, has decided to try a yield revenue approach,with seats priced at $80 for early bookings and at $190 for bookingswithin 1 week of the flight. He estimates that the airline willsell65 seats at the lower price and 35 at the higher price. Variablecost will not change. Which approach is preferable to Mr. Eziz?
Alma has decided to purchase a cell phone with Internetaccess and must choose a rate plan. The “occasional-user”plan is $0.50/minute, regardless of how many minutes ofair time are used. The “frequent-user” plan charges a flatrate of $55/month for 70 minutes of air time plus $0.33/minute for any time over 70 minutes. The “execu-tive” plan charges a flat fee of $75 per month for 100 minutes of air time plus $0.25/minute over 100 minutes. Inthe interest of simplicity, Alma has decided to go with theoccasional-user plan to start with and then upgrade as shesees fit at a later date.a. How much air time per month would Alma need touse before she upgrades from the occasional-user planto the frequent-user plan?b. At what usage rate should she switch from thefrequent-user plan to the executive plan?
Charles Lackey operates a bakery in Idaho Falls, Idaho. Because of its excellent product and excellent location, demand has increased by 5555% in the last year. On far too many occasions, customers have not been able to purchase the bread of their choice. Because of the size of the store, no new ovens can be added. At a staff meeting, one employee suggested ways to load the ovens differently so that more loaves of bread can be baked at one time. This new process will require that the ovens be loaded by hand, requiring additional manpower. This is the only production change that will be made in order to meet the increased demand. The bakery currently makes 1,800 loaves per month. Employees are paid $8 per hour. In addition to the labor cost, Charles also has a constant utility cost per month of $800 and a per loaf ingredient cost of $0.35 Current multifactor productivity for 640 work hours per month =0.27loaves/dollar (round your response to three decimal places).
De Mar, a plumbing, heating, and air-conditioning companylocated in Fresno, California, has a simple but powerful product strategy: Solve the customer’s problem no matter what, solvethe problem when the customer needs it solved, and make sure thecustomer feels good when you leave . De Mar offers guaranteed,same-day service for customers requiring it. The company provides 24-hour-a-day, 7-day-a-week service at no extra charge forcustomers whose air conditioning dies on a hot summer Sundayor whose toilet overflows at 2:30 A.M. As assistant service coordinator Janie Walter puts it: “We will be there to fix your A/C onthe fourth of July, and it’s not a penny extra. When our competitors won’t get out of bed, we’ll be there!”De Mar guarantees the price of a job to the penny before thework begins. Whereas most competitors guarantee their work for30 days, De Mar guarantees all parts and labor for one year. Thecompany assesses no travel charge because “it’s not fair to chargecustomers for…
Stadium View Apartment Complex has 30 apartments to rent. Historical data Trend suggests that any time rent increases by $60.00 per month one apartment becomes vacant. The current rent is $600.00 per month. How many $60.00 increases will enable Stadium View Apartments maximize its total monthly rent revenue?
The call centre operates eight hours a day (0900-1700) five days a week and is closed on weekends. Call volumes and demand fluctuate, but there is one noticeable peak period between mid October and January inclusive (15 weeks). Records show that the average call numbers during the off-peak period is 250 calls per day, whilst on peak days call numbers average 608 calls per day. The call centre is staffed by a team of 3 permanent staff members. Full time staff can handle up to a maximum of 12 calls per hour each and it has been shown that the full time staff can cope with all the calls during off-peak periods. Temporary staff are engaged for the peak period and, generally, can answer 8 calls per hour. Temporary staff, sourced from a local recruitment agency cost £76.75 per 8 hour day shift inclusive of all agency fees. A specialist IT company has proposed installing an enhanced call handling system which, it is claimed, will increase productivity enabling permanent staff to…
Charles Lackey operates a bakery in Idaho Falls, Idaho. Because of its excellent product and excellent location, demand has increased by 55% in the last year. On far too many occasions, customers have not been able to purchase the bread of their choice. Because of the size of the store, no new ovens can be added. At a staff meeting, one employee suggested ways to load the ovens differently so that more loaves of bread can be baked at one time. This new process will require that the ovens be loaded by hand, requiring additional manpower. This is the only production change that will be made in order to meet the increased demand. The bakery currently makes 1,600 loaves per month. Employees are paid $ 8 per hour. In addition to the labor cost, Charles also has a constant utility cost per month of $ 850 and a per loaf ingredient cost of $ 0.35. Part 2 Current multifactor productivity for 640 work hours per month = enter your response here loaves/dollar (round…

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