{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Homework_4_RevenueManagement

Homework_4_RevenueManagement - Homework#4 1 Price $ $ $ $...

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Homework #4 1. Price Demand Revenue  $200.00  40 1  $200.00   $250.00  30 0.857  $214.29   $300.00  20 0.571  $171.43   $350.00  10 0.286  $100.00  The airline should pick $250 as the price of the last tickets 2. Decision Discounted Rev. Revenue (M) Expected Profits (M) Small Factory High Revenue (40%) $6.00 $4.80 Low Revenue (60%) $4.00 Large Factory High Revenue (40%) $5.00 $2.60 Low Revenue (60%) $1.00 Don't Build High Revenue (40%) $0.00 $0.00 Low Revenue (60%) $0.00 The best strategey is to build a small factory 3. 1 Year Demand Produced Sales - Cost = Revenue * Probability Buying 1 machine High  20M 10M 0.05  $500,000.00   $1,000,000.00   $(500,000.00) 0.5  $(250,000.00)  $(500,000.00) Low 10M 10M 0.05  $500,000.00   $1,000,000.00   $(500,000.00) 0.5  $(250,000.00) Buying 2 machines High  20M 20M 0.05  $1,000,000.00   $1,800,000.00   $(800,000.00) 0.5  $(400,000.00)  $(1,050,000.00) Low 10M 10M 0.05  $500,000.00   $1,800,000.00   $(1,300,000.00) 0.5  $(650,000.00) 5 Years Demand Produced Sales - Cost = Revenue * Probability Buying 1 machine No choice 50M 50M 0.05
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern