Question 3: Ashcroft Airlines flies a six-passenger commuter fight once a day to Gainesville, Florida. A...

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Question 3: Ashcroft Airlines flies a six-passenger commuter fight once a day to Gainesville, Florida. A non refundable one-way fare with a reservation costs $129. The daily demand for this flight is given in the following table, along with the probability distribution of no-shows (where a no-show has a reservation but does not arrive at The gate and forfeits the fare): DEMAND PROBABILITY NO-SHOWS PROBABILITY 5 0.05 0 0.15 0.11 I 0.25 7 0.20 2 0.26 0.18 0.16 0.23 0.11 10 0.12 0.10 12 0.08 Ashcroft currently overbooks three passengers per flight. If there are not enough seats for a passenger other at the gate, Ashcroft Airlines refunds his or her fare and provides a $150 voucher good on any trip. The fixed cost for each flight is $450, regardless of the number of passengers. (a) Set up a simulation model and calculate Ashcroft's profit per flight. Replicate the calculation N times each to calculate the average profit per flight. (b) Ashcroft Airlines would like to investigate the profitability of overbooking 0, 1, 2, 3, 4, and 5 passengers. What is your recommendation? Why? Question 3: Ashcroft Airlines flies a six-passenger commuter fight once a day to Gainesville, Florida. A non refundable one-way fare with a reservation costs $129. The daily demand for this flight is given in the following table, along with the probability distribution of no-shows (where a no-show has a reservation but does not arrive at The gate and forfeits the fare): DEMAND PROBABILITY NO-SHOWS PROBABILITY 5 0.05 0 0.15 0.11 I 0.25 7 0.20 2 0.26 0.18 0.16 0.23 0.11 10 0.12 0.10 12 0.08 Ashcroft currently overbooks three passengers per flight. If there are not enough seats for a passenger other at the gate, Ashcroft Airlines refunds his or her fare and provides a $150 voucher good on any trip. The fixed cost for each flight is $450, regardless of the number of passengers. (a) Set up a simulation model and calculate Ashcroft's profit per flight. Replicate the calculation N times each to calculate the average profit per flight. (b) Ashcroft Airlines would like to investigate the profitability of overbooking 0, 1, 2, 3, 4, and 5 passengers. What is your recommendation? Why?