Consider a three-city airline network from A to C with a stop at B. There are two classes per itinerary, with the fares andexpected ODF demands shown in the following table:

Number	Itinerary	Class	Fare	Expected Demand
1	A to B	Full fare	300	30
2		Discount	230	60
3	B to C	Full Fare	280	20
4		Discount	160	80
5	A to C	Full Fare	500	30
6		Discount	340	40

The airline has 100 seats on the leg from A to B, and 120 seats on the leg from B to C.

1. Suppose that the airline company wants to use the deterministic linear programming method to determine thepartitioned booking limits. Formulate this problem as a linear program and solve it using Excel.

1. Suppose that the airline company wants to use virtual nesting method to determine the nested booking limits. The manager decides that each leg (A to B, and B to C) has three buckets, defined as follows:

Bucket 1: Net leg fares > 275

Bucket 2: Net leg fares between 200 and 275 Bucket 3: Net legfares < 200

Please use the sensitivity report from part a) to find the opportunity cost for each legs seat, then calculate the net legfares and index buckets.

1. Given the indexed buckets for the leg from A to B in part b), use ESMR-b to find the nested booking limits forthis leg. Assume all ODFs demands follow normal distribution with standard deviation equal to 5.