Q 1 Korean Airlines routinely overbooks its flights from Atlanta to Seoul. Overbooking discounted seats can be expensive because providing a bumped passenger with a last-minute flight on a competing carrier can cost $2,000. A 150-passenger jet costs about$150,000 to operate from Raleigh to Atlanta. The average ticket price is $1,500.

a) How many seats should be overbooked? (show yourcalculations)

b Korean Airline increased the average ticket price from$1,500 to $1,900 on its Atlanta/Seoul route for the holidays. How would the increased ticket price affect the number of seats overbooked? (show your calculations)

Q2. John sells graphic card update kits for computers.John purchases these kits for $20 per kit and sells about 250 kits ayear. Each time John places an order, it costs him $25 to cover shipping and paperwork. John figures the cost of holding an update kit in inventory is about $3.50 per kit per year.

a What is the economic order quantity (show your calculations) (If your EOQ is a fraction, use a whole number)?

b How many times per year will John place an order? (show your calculations)

c How much will it cost John to order and hold these kits each year? (show your calculations)

d The manufacturer of the graphic card update kits has agreed to charge John just $15 per kit if John orders 250 kits at atime. Should John accept the manufacturing?s offer and why? (show your calculations)

Table. The frequency of no-shows NO-SHOWS 1 2 3 4 5 6 FREQUENCY 15 10 10 5 5 5