Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The manager of an opera theater considers changing the overbooking policy of his upcoming concerts. Customers make reservation online prior to the concert at no
The manager of an opera theater considers changing the overbooking policy of his upcoming concerts. Customers make reservation online prior to the concert at no cost and make payment when they show up at the theater. The opera show is very popular and all reservations is sold out on the first day. (You can assume that the demand is the same as reservation limit). The theater has 300 seat and the ticket cost $50 per seat. Historical records show that about 9% of reservation holders do not show up. If the manager overbooks and more than 300 individuals show up, those who do not have seats will be given guaranteed reservations and VIP seats to the next coming show. Mgreover, to keep his customers happy, the manager gives each individual who is bumped $20 worth of gift certificates. The manager currently accepts 310 reservations Use Excel to calculate the average profit over the 1,000 replications. Use scenario manager to decide the number reservations the manager should allow. Try 310, 320, 330, 340, 350 and 360, which one should the manager choose
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started