Quiz 4_11F

Quiz 4_11F - maximize expected profit, how many...

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MGMT 30600 – Quiz 4, Fall 2011 Name: Session: ___________________________ A ticket from Indianapolis to Orlando on Deleast Airlines sells for $200. The plane can hold 100 people. The fixed cost for Deleast to fly a plane follows a discrete distribution as given in the table below: Cost ($) 6,000 6,500 7,000 7,500 8,000 Probability 15% 25% 35% 20% 5% Each passenger on the plane incurs variable cost (for food and fuel) that satisfies a normal distribution with mean of $40 and standard deviation of $8. There are six alternative numbers for Deleast to consider for booking reservations (see the following Excel model). If the flight is overbooked, anyone who cannot get a seat receives $330 in compensation. On average, 97% of all people who have a reservation show up for the flight. To
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Unformatted text preview: maximize expected profit, how many reservations for the flight should Deleast book? Hint : The function RISKBINOMIAL can be used to formulate the number who show up. Question 1 (2 points): Write down your formula for cell B17. Question 2 (2 points): Complete the following formula for cell B22: =RiskDiscrete( , ) Question 3 (2 points): Write down your formula for cell C22. Question 4 (2 points): Write down your formula for cell D22. Question 5 (2 points): What is the best # of reservations among the six given alternatives? Solution to Quiz 4 Question 1: =RiskSimtable(B19:G19) Question 2: =RiskDiscrete(B7:F7,B8:F8) Question 3: =RiskBinomial(B17,B15) Question 4: =MIN(C22,B4) Question 5: 104...
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This note was uploaded on 01/17/2012 for the course MGMT 306 taught by Professor Staff during the Spring '08 term at Purdue.

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Quiz 4_11F - maximize expected profit, how many...

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