Question: Reconsider the Leisure Air problem from Section 4.5. The demand forecasts shown in Table 4.16 represent Leisure Airs best estimates of demand. But, because demand
Reconsider the Leisure Air problem from Section 4.5. The demand forecasts shown in Table 4.16 represent Leisure Air’s best estimates of demand. But, because demand cannot be forecasted perfectly, the number of seats actually sold for each origin-destinationitinerary fare (ODIF) may turn out to be smaller or larger than forecasted. Suppose that Leisure Air believes that economic conditions have improved and that their original forecast may be too low. To account for this possibility, Leisure Air is considering switching the Boeing 737–400 aeroplanes with Boeing 757–200 aeroplanes that Leisure Air has available in other markets. The Boeing 757–200 aeroplane has a seating capacity of
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