SpringOut! dance studios are holding a swing dance and jazz fair featuring local jazz artists and dancers. The fair will be held over three nights. Tickets can be purchased on the day or in advance. Advance purchase tickets can be bought for one-night, two-nights, or three-nights and these are available at a lower price than door admissions on the night. Advance one-night tickets are available for any of the three nights. Advance two-night tickets are for successive evenings and commence on either night one or two.

Capacity of the venue is 200 each night. Demand and prices for the tickets are presented in the table below.

Tanya Kattel, the lead event organiser, has asked you to prepare some analyses to help her figure out how many of each ticket type to sell.

Required

1. a) EMSR: Calculate protection levels and booking limits for each of the three nights.

   For the EMSR analysis, Tania wants to meet demand for all the two-night and three- night tickets. You therefore only need to calculate protection levels for tickets purchased on the day and booking limits for advance one-night tickets.

   Analyse each of the three nights separately. Model the demand for each ticket using a Poisson distribution. After taking into account two-night and three-night tickets sold, the capacity available each night is as follows:

   1. Night one: 160 capacity

   2. Night two: 130 capacity

   3. Night three: 160 capacity

2. b) Linear programming: Formulate and solve the linear programme using Excel and the Solver function. For this analysis, disregard the information about EMSR and Tania’s requirements given in Part.

The question includes two parts:

Part 1: Do Excel spreadsheet to answer EMSR and linear programming answers in a single spreadsheet. The question includes the spreadsheet organized in the following: a) Answers for EMSR analysis; b) Linear programme set up for Excel solver; c) Answer report; d) Sensitivity report

Part 2: Prepare a brief report for Tanya Kattel that outlines the key results and possible actions from the EMSR and linear programming analyses. The report needs to include:

a) Present the maximum expected revenue figures for the Part 1 analyses. Briefly outline how Tanya would use the EMSR and linear programming information to achieve the maximum expected revenue for each analysis.

b) Respond to her statement: “I do see that the linear programming results are better than the EMSR results, so clearly that is what we should be using. Unless there is something I am not getting?” - Describe TWO considerations for Tanya regarding the use of EMSR versus linear programming for SpringOut!

c) Recommend ONE possible change that Tanya should consider based on the analyses, explaining the importance of this change for SpringOut!’s objectives.
 

Ticket Advance purchase One-night Two-nights Three-nights Purchase on the day Ticket Ticket Ticket Price Expected Notes Demand $70 $120 $120 $140 $100 $100 $100 70 Price and demand per night, for each of the three nights 30 | Starting night one 30 Starting night two 10 Starting night one 120 Night one 80 Night two 100 Night three