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 $142 for the one-way flight. An average of 79 passengers are on each flight. The variable cost of a filled seat is $26. Aysajan Eziz, the new operations manager,has decided to try a yield revenue approach, with seats priced at $82 for early bookings and at $187 for bookings within 1 week of the flight. He estimates that the airline will sell 67 seats at the lower price and 34 at the higher price. Variable cost will not change.Total S contribution in the single price approach is $(enter your response as a whole number).Total S contribution in the two price points approach is $(enter your response as a whole number).Which approach is preferable to Mr. Eziz?O A. Proposed model - two price pointsO B. Current model - single price

Given data; Single price approach Two price point approach Seating capacity 120 120 Passengers…

Answered: Southeastern Airlines's daily flight…

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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An airline company must plan its fleet capacity and its long-term schedule of aircraft usage. For one flight segment, the average number of customers per day is 70, which represents a 65 percent utilization rate of the equipment assigned to the flight segment. If demand is expected to increase to 91 customers for this flight segment in three years, what capacity requirement should be planned? Assume that management deems that a capacity cushion of 35 percent is appropriate. The needed capacity requirement is customers per day. (Enter your response rounded up to the next whole number.)
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