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Aggregate Planning and S& OP Ch13 13.22 Uriel Southeastern Airlines's daily flight from Atlanta to Charlotte uses a Boeing 737, with all-coach seating for 120 people. In the past the airline has priced every seat at $140 for the one was fight. An average of 80 passengers are on each flight. The variable cost of a filled seat is $25. Katie Morgan, the new operations manager, has decided to try a yield revenue approach, with seats priced at $80 for early bookins and at $190 for bookings within 1 week of flight. She estimates that the airline will sell 65 seats at the lower prie and 35 at the higher price. Variable cost will not change. Which approach is preferabble for Ms. Morgan? Information All coach seating One price in past Average Variable cost Potential Changes Early booking Book within 1 week Variable cost stays $ $ $ $ 120 People 140.00 80 Seats booked 25.00 80.00 $190.00 25.00 Estimated seats: Estimated seats: 65 35

Aggregate Planning and S& OP Ch13 13.22 Uriel Southeastern Airlines's daily flight from Atlanta to Charlotte uses a Boeing 737, with all-coach seating for 120 people. In the past the airline has priced every seat at $140 for the one was fight. An average of 80 passengers are on each flight. The variable cost of a filled seat is $25. Katie Morgan, the new operations manager, has decided to try a yield revenue approach, with seats priced at $80 for early bookins and at $190 for bookings within 1 week of flight. She estimates that the airline will sell 65 seats at the lower prie and 35 at the higher price. Variable cost will not change. Which approach is preferabble for Ms. Morgan? Information All coach seating One price in past Average Variable cost Potential Changes Early booking Book within 1 week Variable cost stays $ $ $ $ 120 People 140.00 80 Seats booked 25.00 80.00 $190.00 25.00 Estimated seats: Estimated seats: 65 35

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Aggregate Planning and S&OP Ch13 13.22 Uriel Southeastern Airlines's daily flight from Atlanta to Charlotte uses a Boeing 737, with all-coach seating for 120 people. In the past the airline has priced every seat at $140 for the one was fight. An average of 80 passengers are on each flight. The variable cost of a filled seat is $25. Katie Morgan, the new operations manager, has decided to try a yield revenue approach, with seats priced at $80 for early bookins and at $190 for bookings within 1 week of flight. She estimates that the airline will sell 65 seats at the lower prie and 35 at the higher price. Variable cost will not change. Which approach is preferabble for Ms. Morgan? Information All coach seating One price in past Average Variable cost Potential Changes Early booking Book within 1 week Variable cost stays $ $ $ $ 120 People 140.00 80 Seats booked 25.00 80.00 $190.00 25.00 Estimated seats: Estimated seats: 65 35
Transcribed Image Text:Aggregate Planning and S&OP Ch13 13.22 Uriel Southeastern Airlines's daily flight from Atlanta to Charlotte uses a Boeing 737, with all-coach seating for 120 people. In the past the airline has priced every seat at $140 for the one was fight. An average of 80 passengers are on each flight. The variable cost of a filled seat is $25. Katie Morgan, the new operations manager, has decided to try a yield revenue approach, with seats priced at $80 for early bookins and at $190 for bookings within 1 week of flight. She estimates that the airline will sell 65 seats at the lower prie and 35 at the higher price. Variable cost will not change. Which approach is preferabble for Ms. Morgan? Information All coach seating One price in past Average Variable cost Potential Changes Early booking Book within 1 week Variable cost stays $ $ $ $ 120 People 140.00 80 Seats booked 25.00 80.00 $190.00 25.00 Estimated seats: Estimated seats: 65 35
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