Calgary Airlines routinely overbooks its flight from Calgary to Vancouver. Overbooking discounted seats can be expensive because
Question:
Calgary Airlines routinely overbooks its flight from Calgary to Vancouver. Overbooking discounted seats can be expensive because providing a bumped passenger with a last-minute flight on a competing carrier can cost $450. A 120-passenger jet costs about $6000 to operate from Calgary to Vancouver. The average ticket price is $300.
a. Given the frequency of no-shows in the following table, how many seats should be overbooked?
b. Calgary Air lines offers special rates on its Calgary/Vancouver route for the holidays. How would a $200 ticket price affect the number of seats overbooked?
No-Shows Frequency
1 ..................................................................... 15
2 ..................................................................... 10
3 ..................................................................... 10
4 ...................................................................... 5
5 ...................................................................... 3
6 ...................................................................... 5
Step by Step Answer:
Operations Management Creating Value Along the Supply Chain
ISBN: 978-1118301173
1st Canadian Edition
Authors: Roberta S. Russell, Bernard W. Taylor, Ignacio Castillo, Navneet Vidyarthi