311_exam_2_Hamid_solution

311_exam_2_Hamid_solution - Name: (please print) Exam 2...

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1 Name: (please print) Exam 2 BUAD311 – Operations Management March 29, 2012 Professor Hamid Nazerzadeh 1 hour and 40 minutes All together the exam has a maximum of 80 ??? points. There are 10 pages including this page. This is a closed-book, closed-notes exam. You are allowed to use one double-sided crib sheet (8.5x11). Sharing a crib sheet with other students is not allowed. You may use a simple calculator. No cell phones. No laptops. No PDAs. You may earn a partial credit for each question unless otherwise noted. Show your work completely. If you don’t show your work, there will be no credits. Do not be tempted to seek “inspiration” from a neighbor’s exam. Poor scores can be overcome, but cheating will be dealt with harshly! Please sign here to indicate that you have adhered to university policies regarding ethical behavior in preparing for and completing this exam. “I hereby certify that I have adhered to the university policies regarding ethical behavior in preparing for and completing this exam.”
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2 Section A: Multiple Choices 1. (3 points) The airline has a flight with 100 seats. The airline knows the number of cancellation would be uniformly distributed between 4 and 8 (inclusive). Fare is $300; denied boarding cost is estimated to be $700. To determine whether or not to sell the 105 th seat, the following decision tree for marginal analysis is drawn. What are the right numbers to fill the blank , and ? a. 0 -700 300 b. 0 -400 300 c. 300 -400 300 d. 300 -700 0 e. 300 -400 0 Answer e. 2. (3 points) Which of one of the following is wrong? a. The two biggest expenses at airlines are labor and fuel. b. Competition can be the most important factor in the price you pay for an airplane ticket. c. The number of passengers that are denied boarding is higher than 10 years ago. d. The cost of involuntary denied boarding can be significantly higher than when volunteers give up the seat.
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3 Section B: Problems 1. (15 points) HOMA airline operates 3 direct flights: Los Angles (LAX) to Minneapolis (MSP), Minneapolis to New York (JFK), and Los Angeles to New York. Here are the capacities of each flight: LAX-MSP LAX-JFK MSP-JFK Capacity 80 70 100 The airline offers 4 types of tickets (itineraries): LAX-MSP LAX-JFK (direct) LAX-JFK (via MSP) MSP-JFK Demand 80 90 100 50 Price $100 $250 $175 $90 The airline uses the following linear program to determine how many of each ticket it should sell in order to maximize its revenue subject to its capacity constraint. Decision Variables: Let ± be the number of tickets of type ² the airline sells. Type 1: LAX- MSP; Type 2: LAX-JFK (direct); Type 3: LAX-JFK (via MSP); Type 4: MSP-JFK Objective: ³´µ ¶ ·¸¸ ¹ º » ¼½¸¶ ¹ ¾ » ·¿½¶ ¹ À » Á¸¶ ¹  Demand Constraints: ¸ à º à ĸ ¸ à ¾ à Á¸ ¸ à À à ·¸¸ ¸ à  à ½¸ Capacity Constraints: º » À à ĸ  » À à ·¸¸ ¾ à ¿¸¶
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311_exam_2_Hamid_solution - Name: (please print) Exam 2...

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