1. A tour operator sees demand for their trips with mean of 100 and stdev of 20. They have to book tickets in advance for their trips which they then turn around and sell to their clients. Their profit margin is 500 dollars on each trip that is sold, and if they don’t sell a ticket to their client, they have to sell it back at a discount of 200 dollars. What is the optimal service level they should target for their clients?

A. 29 percent

B. 33 percent

C. 54 percent

D. 71 percent

2. A tour operator sees demand for their trips with mean of 100 and stdev of 20. They have to book tickets in advance for their trips which they then turn around and sell to their clients. Their profit margin is 500 dollars on each trip that is sold, and if they don’t sell a ticket to their client, they have to sell it back at a discount of 200 dollars. What is the optimal safety stock?

A. 8 tickets

B. 11 tickets

C. 14 tickets

D. 20 tickets

3. A tour operator sees demand for their trips with mean of 100 and st. dev of 20. They have to book tickets in advance for their trips which they then turn around and sell to their clients. Their profit margin is 500 dollars on each trip that is sold, and if they don’t sell a ticket to their client, they have to sell it back at a discount of 200 dollars. What is the optimal number of tickets to reserve for their clients?

A. 108 tickets

B. 111 tickets

C. 114 tickets

D. 89 tickets

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