Q1. UPS operated a B747-428F (N580UP) on April 2, 2023 from Shenzhen (SZX) to Anchorage (ANC)....

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Q1. UPS operated a B747-428F (N580UP) on April 2, 2023 from Shenzhen (SZX) to Anchorage (ANC). The payload capacity of the aircraft is 100 tons. The ad hoc overbooking rate is set at 5%. Assume the show-up rate of cargo shipment is 0.98. The following table presents a set of cost parameters incurred by UPS on its SZX-ANC flight segment. Parameters Unit spoilage cost Unit offloading cost Assumed Values $826 per ton $725 per ton (1) Based on the information provided, calculate the total spoilage cost and total offloading cost incurred by UPS on its flight from SZX to ANC. (2) Now suppose that the unit revenue earned by UPS on the SZX-ANC flight segment is $826 per ton, the unit penalty cost is $725 per ton, and the unit variable cost of the flight operation from SZX to ANC is $445 per ton. The cargo shipment show-up rate is assumed to follow a uniform distribution from 0.7 to 1.1. What is the optimal overbooking rate for UPS in order to maximize its expected profit on the SZX-ANC flight segment? (3) Now suppose that the unit revenue earned by UPS on the SZX-ANC flight segment is still $826 per ton, the unit penalty cost is $725 per ton, and the unit variable cost of the flight operation from SZX to ANC is $445 per ton. The cargo shipment show-up rate is assumed to follow a normal distribution with mean at 0.9 and standard deviation at 0.1. What is the optimal overbooking rate for UPS in order to maximize its expected profit on the SZX-ANC flight segment? Q1. UPS operated a B747-428F (N580UP) on April 2, 2023 from Shenzhen (SZX) to Anchorage (ANC). The payload capacity of the aircraft is 100 tons. The ad hoc overbooking rate is set at 5%. Assume the show-up rate of cargo shipment is 0.98. The following table presents a set of cost parameters incurred by UPS on its SZX-ANC flight segment. Parameters Unit spoilage cost Unit offloading cost Assumed Values $826 per ton $725 per ton (1) Based on the information provided, calculate the total spoilage cost and total offloading cost incurred by UPS on its flight from SZX to ANC. (2) Now suppose that the unit revenue earned by UPS on the SZX-ANC flight segment is $826 per ton, the unit penalty cost is $725 per ton, and the unit variable cost of the flight operation from SZX to ANC is $445 per ton. The cargo shipment show-up rate is assumed to follow a uniform distribution from 0.7 to 1.1. What is the optimal overbooking rate for UPS in order to maximize its expected profit on the SZX-ANC flight segment? (3) Now suppose that the unit revenue earned by UPS on the SZX-ANC flight segment is still $826 per ton, the unit penalty cost is $725 per ton, and the unit variable cost of the flight operation from SZX to ANC is $445 per ton. The cargo shipment show-up rate is assumed to follow a normal distribution with mean at 0.9 and standard deviation at 0.1. What is the optimal overbooking rate for UPS in order to maximize its expected profit on the SZX-ANC flight segment?

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