Question
an international air carrier plans to purchase a jumbo-class air craft to serve the chicago-london city pair .restrictions in landing slots at heathrow airport allowed
an international air carrier plans to purchase a jumbo-class air craft to serve the chicago-london city pair .restrictions in landing slots at heathrow airport allowed the purchase of five landing/take-off slots , one per week day . the carrier does not intend to offer weekend service .the following table presents passenger demand estimates anf fares charged by competitors :
trip | five-weekday demand | one-way fare ($) |
chicago-london-chicago | 975 | 400 |
chicago-london | 230 | 680 |
london-chicago-london | 880 | 475 |
london-chicago | 400 | 775 |
the round trip chicago-london-chicago is 13,000 km , and the air craft choises and costs are :
aircraft | seating capicity | oper.cost seat-km | fixed cost/year |
B-747 | 385 | 2.75 cent | $4.5 million |
DC-10 | 235 | 2.97 cent | $3.7 million |
should the airline enact service and which aircraft should be chosen? solve based on profit maximization .
Whether chicago - london people re subset of the people who have confirmed for the return ticket. And same case with the london - chicago? yes i think ,solve it like if it's or it's not
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