NorthStar Airlines runs daily flights from Halifax to Montreal. The planes hold 60 passengers and cater to
Question:
NorthStar Airlines runs daily flights from Halifax to Montreal. The planes hold 60 passengers and cater to the business traveler with comparable business rates. The recent economic downturn has reduced the occupancy rate of flights to such an extent that NorthStar would like to offer a set number of seats at discount rates to gain more passengers. The board of directors is worried that discounted seats will cut into profit margins and will upset the regular business traveler. The ticket price for a business traveler is $350. Discounted tickets would sell for $120. Assuming that empty seats can be sold if discounted, use the following data gathered from 100 flights to determine how many seats should be discounted.
No. of Full-Fare
Passengers Frequency
10 ............................................................................. 15
20 ............................................................................. 24
30 ............................................................................. 25
40 ............................................................................. 20
50 ............................................................................. 10
60 .............................................................................. 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