Operations Management: Sustainability and Supply Chain Management (12th Edition)
12th Edition
ISBN: 9780134130422
Author: Jay Heizer, Barry Render, Chuck Munson
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 13, Problem 1VC
Summary Introduction
Case summary:
Many companies including Company OM tried to implement dynamic pricing in their ticketing system. The dynamic pricing based on the popularity and the number of games is as follows:
| Popularity rating of opponent | Number of games | Price |
| Tier I | 3 | $187 |
| Tier II | 3 | $170 |
| Tier III | 4 | $85 |
| Tier IV | 6 | $75 |
| Tier V | 14 | $60 |
| Tier VI | 9 | $44 |
| Tier VII | 6 | $40 |
| Average | $68 |
Company OM has capable revenue management technique. It follows three different types of pricing strategy, which are setting price during the beginning of the season and do not change throughout the season, setting a price based on the popularity of an opponent, and pricing tickets based on the projected demand and changing based on the actual market demand.
Person P and Person D of Company OM use different tools to change the seat price based on the demand. Company OM would provide offer prices and seats at a prime rate in the existing games.
To determine: How Company OM differs from other air carriers regarding the revenue management.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Question 1
Optimising Warehousing and Material Handling Systems: A Case Study of a Malaysian
Manufacturing Firm
Warehousing refers to the process of storing physical inventory intended for distribution or
sale. This process involves the use of material handling systems, which manage the
movement of goods from production to final consumption. These systems play a critical role
in protecting, organising, storing, and transporting products.
For this report, select a manufacturing company based in Malaysia, irrespective of its sub-
sector (such as electronics, transportation, pharmaceuticals, food and beverage, chemicals,
plastics, metals, textiles, etc.), and provide a detailed analysis of its warehousing and
material handling systems..
Your report must incorporate the subsequent details:
i. Introduce the chosen company, such as its location, size, products, and more.
Elaborate on the warehousing process that the company employs and suggest ways
to enhance it.
ii.
iii.
Describe the…
May
77.000
Problem 4 (Regression Analysis, Service Company)
Bobby Gonzales owns a catering company that prepares banquets and parties
for both individual and business functions throughout the year. Gonzales
business is seasonal, with a heavy schedule during the summer months and
the year-end holidays and a light schedule at other times. During peak
periods there are extra costs.
One of the major events Gonzales' customers request is a cocktail party. He
offers a standard cocktail party and has developed the following cost
structure on a per person basis.
Food and bevernges
Labor (0.5 hour x PIO per hour)
Overhead (0.5 hour x P14 per hour)
Total costs per person
PI5.00
5.00
7.00
P27.00
Gonzales is quite certain about his estimates of the food, beverages, and
labor costs but is not as comfortable with the overhead estimate. This
estimate was based on the actual data for the past 12 months presented
below. These data indicate that overhead costs vary with the direct labor-
hours used. The…
QUESTION 2
In the airline market, vacation-traveler customers have a more elastic demand than business-traveler customers, although the marginal cost of serving either type of customer is the same. If the airline companies engage in price discrimination, which customers end up paying a higher price?
Vacation-traveler customers.
Prices will be the same because the marginal costs are the same.
There is not enough information to answer. We also need to know the average cost of serving each type of customer.
Business-traveler customers.
QUESTION 3
A seller engages in price discrimination by market segment. Morning customers have a price elasticity of demand E = -2, while evening customers have a price elasticity of demand E = -3. The MC of selling to both groups is the same and constant at $100. Therefore:
morning customers will pay P=$400, while evening customers will pay $300.
morning customers will pay P=$400, while evening…
Chapter 13 Solutions
Operations Management: Sustainability and Supply Chain Management (12th Edition)
Ch. 13 - Prob. 1DQCh. 13 - Why are SOP teams typically cross-functional?Ch. 13 - Prob. 3DQCh. 13 - Prob. 4DQCh. 13 - Prob. 5DQCh. 13 - Prob. 6DQCh. 13 - Question: 7. What is level scheduling? What is the...Ch. 13 - Question: 8. Define mixed strategy. Why would a...Ch. 13 - Prob. 9DQCh. 13 - Prob. 10DQ
Ch. 13 - Question: 11. What is the relationship between the...Ch. 13 - Prob. 12DQCh. 13 - Question: 13. What are major limitations of using...Ch. 13 - Prob. 14DQCh. 13 - Question: 13.1 Prepare a graph of the monthly...Ch. 13 - Prob. 2PCh. 13 - The president of Hill Enterprises, Terri Hill,...Ch. 13 - Prob. 4PCh. 13 - Prob. 5PCh. 13 - Prob. 6PCh. 13 - Prob. 7PCh. 13 - Prob. 8PCh. 13 - Prob. 9PCh. 13 - Question: 13.10 The SOP team (see Problem 13.9)...Ch. 13 - Prob. 11PCh. 13 - Prob. 12PCh. 13 - Prob. 13PCh. 13 - Question: 13.14 Jerusalem Medical Ltd., an...Ch. 13 - Prob. 15PCh. 13 - Prob. 16PCh. 13 - Prob. 17PCh. 13 - Question: 13.18 Jose Martinez of El Paso has...Ch. 13 - Prob. 19PCh. 13 - Prob. 24PCh. 13 - Prob. 25PCh. 13 - Prob. 26PCh. 13 - Prob. 1CSCh. 13 - Prob. 2CSCh. 13 - Prob. 1VCCh. 13 - Prob. 2VCCh. 13 - Question: 3. What are some concerns the team needs...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.Similar questions
- Question content area Part 1 Maria manages a bakery, that specializes in ciabatta bread, and has the following information on demand and costs: Ciabatta Bread Sold Per Hour (Q) Price (P) Total Cost (TC) 0 $6.00 $1.50 1 5.50 5.50 2 5.00 8.50 3 4.50 11.00 4 4.00 13.00 5 3.50 14.50 6 3.00 15.50 7 2.50 17.00 8 2.00 19.50 Part 2 a. To maximize profits, Maria should sell enter your response here loaves of ciabatta bread per hourarrow_forwardModule 5 Question 6 The owner of the Petreno Pharmaceutical Company is evaluating the expected annual sales for a new line of facial care products and estimates that there is a 60 percent chance that the product line will be extremely successful, in which case it will generate sales next year of 8.0 million. However, since the new product line has a unique appeal that will require substantial advertising by its manufacturer to gain consumer acceptance, there is a 40 percent chance that revenues for next year will be a modest 1.0 million. What is the expected level of revenues for the new product line? The expected total revenue for the new line of products is $ ___ millionarrow_forwardQuestion 4 plzarrow_forward
- University College Sabah Foundation QUESTION I As customers are often reluctant to eat in hotel restaurants because they assume that they are too expensive, Accor (Sofitel, Novotel, Mercure, Pullman, Ibis, Ibis styles and others) is looking at buying over the Secret Recipe chain (restaurants in Malaysia, Singapore, Indonesia, Thailand, China, Brunei, Cambodia and Myanmar) to place a Secret Recipe in each of its Ibis and Ibis Styles properties (4 in Malaysia, 2 in Singapore, 12 in Thailand and 83 in China) as well as maintain the current restaurants. Accor hotels are typically under management contracts with local owners. b. Analyse the synergies between the two companies in terms of strategic fit.arrow_forwardQuestion 2 If Amazon had ships to transport cargo, where in the shipping cycle would they take risks and maybe have financial problems? Trough or peak and why ? Full explain this question and text typing work only thanksarrow_forwardQuestion 2 "In air cargo revenue management, for every flight we operate, we first must forecast the capacity so we can understand how much space we can sell. Unlike on the passenger side where the number of seats is rather standard, the cargo capacity will vary based on the route, the aircraft, the number of passengers, the number of bags passengers are carrying and other metrics." Karri Kauppi, Head of Cargo Revenue Management & Pricing, Finnair Source: The Complexities of Air Cargo Revenue Management https://www.kambr.com/articles/the-complexities-of-air-cargo-revenue-management (a) According to Karri Kauppi, cargo revenue management (CRM) is complex. The first thing in CRM is to forecast the air cargo capacity which would depend on factors e.g. the route, the aircraft, the number of passengers, the number of bags and other metrics. Appraise how Karri practises CRM in forecasting air cargo capacity and pricing available cargo space for sale in order to maximize profitability.…arrow_forward
- QUESTION 1 The enrollment of the new students at ABC University has increased steadily over the past few years. The university would like to plan the workforce for academicians for year six to year eight. The reyulalury buuy, Malaysian Acuredilaliun Ayency (MQA) has set the standard of the ratio between academicians and student to be 1:50. The data below show the number of students enrolled for the past five years. Year Demand 4500 5000 5200 1 2 3 4 5600 5800 The university's administration considers using simple regression analysis to forecast the number of students enrolled in the next three years. a) Use simple linear regression to forecast the annual number of students enroll for the next three years. b) Determine the correlation coefficient for the data and interpret its meaning. c) Determine the coefficient of determination for the data and interprot its moaning. d) Determine the number of academicians that can fulfill the MQA standard for year six.arrow_forwardQuestion 2 Alpha Electronics (AE) is a large manufacturer of electronics products. The company sells about 1,000 high-value products to 10,000 customers all over the world. Market competition forces AE to commit to a short order fulfilment lead time to its customers and the committed lead time is typically much shorter than its manufacturing lead time. (a) AE is looking for a suitable supply chain integration strategy for improving its operations. Discuss the pros and cons of the three common supply chain integration strategies and suggest the most appropriate one for AE. (b) AE is planning to reduce the number of distribution centres in its distribution network from 10 to 5. Estimate the minimum number of decision variables for AE's distribution problem and suggest an approach that AE can simplify the mathematical model for optimizing the distribution network. Discuss the advantages and disadvantages of the approach. (c) AE is exploring the feasibility of forming a strategic alliance…arrow_forwardQuestion 6 only questions in redarrow_forward
- Question 4 b) Company ABC wishes to evaluate whether to produce a component internally or purchase from a vendor. The firm has the following options: Internal Production Process 1 Process 2 Purchase from Vendor Vendor 1 Vendor 2 Vendor 3 Variable cost of $17 per unit; annual fixed cost of $200,000 Variable cost of $14 per unit; annual fixed cost of $240,000 Offers a price of $20 per unit for any volume up to 30,000 units Offers a price of $22 per unit for 1,000 units or less, and $18 per unit for large quantities Offers a price of $21 per unit for the first 1,000 units and $19 per unit for additional units If the annual demand is 10,000 units, which alternative would be best from a cost standpoint? For 20,000 units, which alternative would be best?arrow_forwardQuestion 1 You first conduct analysis for ordering product 101 and shipping by truckload transportation.Your preferred truckload carrier will ship a truckload Supplier A’s facility to your AtlantaDC for $800 total given that they are separated by about 250 miles. Each truckload hasa capacity for 700 units of product 101. When using truckload transportation, the transittime is 2 days. However, since your supplier has limited capacity to process orders, theyonly guarantee to ship your order within 10 days of receiving the order.1. Recall that pipeline inventory cost does not depend on the quantity shipped but onlythe transportation mode. In this problem, the lead time TL between when you pay foran order and when you receive it is 10 days of order processing plus 2 days of transit time: TL = 12 days. Thus, pipeline inventory cost per item should be computed asr ∗ v ∗ TL in compatible time units. What is the pipeline inventory cost per week youwill incur using truckload trucking?arrow_forwardQuestion 3 The Mental Health Parity Act requires the same level of health benefits coverage for mental illness as for a physical condition. True False Question 4 A hospital in a rural community is having difficulty attracting radiation therapists. In an effort to attract young, newly trained therapists, the department has decided to pay these newly graduated therapists at a pay rate equivalent to that of radiation therapists who have been with the hospital for up to ten years. What compensation issue is relevant to this scenario? O Internal equity O External competitiveness OExtrinsic rewards O Intrinsic rewardsarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,
Operations ManagementOperations ManagementISBN:9781259667473Author:William J StevensonPublisher:McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi...Operations ManagementISBN:9781259666100Author:F. Robert Jacobs, Richard B ChasePublisher:McGraw-Hill Education
Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage Learning
Production and Operations Analysis, Seventh Editi...Operations ManagementISBN:9781478623069Author:Steven Nahmias, Tava Lennon OlsenPublisher:Waveland Press, Inc.
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,
Operations Management
Operations Management
ISBN:9781259667473
Author:William J Stevenson
Publisher:McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi...
Operations Management
ISBN:9781259666100
Author:F. Robert Jacobs, Richard B Chase
Publisher:McGraw-Hill Education
Purchasing and Supply Chain Management
Operations Management
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Cengage Learning
Production and Operations Analysis, Seventh Editi...
Operations Management
ISBN:9781478623069
Author:Steven Nahmias, Tava Lennon Olsen
Publisher:Waveland Press, Inc.