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

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Question 3 Ashcroft Airlines Flies A Six Passenger Commuter Fight Once A Day To Gainesville Florida A Nonrefundable O 1 (42.97 KiB) Viewed 74 times

Question 3: Ashcroft Airlines flies a six-passenger commuter fight once a day to Gainesville, Florida. A nonrefundable 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 0.05 0.11 0.20 0.18 0,16 0.12 6 7 8 9 10 11 12 0.10 0.08 NO-SHOWS 0 1 2 3 4 PROBABILITY 0.15 0.25 0.26 0.23 0.11 Ashcroft currently overbooks three passengers per flight. If there are not enough seats for a passenger at the gate, Ashcroft Airlines refunds his or her fare and provides a $150 voucher good on any other 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?