Next week, Super Discount Airlines has a flight from New York to Los Angeles that will be booked to capacity. The airline knows frompast history that an average of 35 customers (with a standard deviation of 24) cancel their reservation or do not show for the flight.Revenue from a ticket on the flight is $134. If the flight is overbooked, the airline has a policy of getting the customer on the nextavailable flight and giving the person a free round-trip ticket on a future flight. The cost of this free round-trip ticket averages $263.Super Discount considers the cost of flying the plane from New York to Los Angeles a sunk cost.By how many seats should Super Discount overbook the flight? (Use Excel's NORMSINV() function to find the correct critical valuefor the given a-level. Do not round intermediate calculations. Round your answer to the nearest whole number.)Overbooked bypassengers

The news vendor model is an essential principle in supply chain and inventory management. The…

Answered: Next week, Super Discount Airlines has…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter11: Simulation Models

Section: Chapter Questions

Problem 47P

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“As soon as the customer places an Order, it is received by the Sales department and a Sales Order is created. The Sales Order is sent to the Finance Department to check if the customer has any outstanding balance for more than 60 days. The AR Clerk at the Finance Department checks and sends the results back to the Sales Department. If there is an outstanding balance for more than 60 days, the Sales Department puts the Order on hold and notifies the customer. Otherwise, the Order Entry Clerk creates an Order Confirmation and sends it to the customer. Simultaneously a Picking List is generated and sent to the Order Fulfilment Department who picks up the next set of process steps. The Order Fulfilment Department receives the Picking List and determines which Warehouse is closest to the Customer location. The Picking List is sent to that Warehouse location. There, the items from the Picking List are picked. An Invoice is generated and printed. The items are packed along with the printed…
Next week, Super Discount Airlines has a flight from New York to Los Angeles that will be booked to capacity. The airline knows from history that an average of 25 customers (with a standard deviation of 13) cancel their reservation or do not show for the flight. Revenue from a ticket on the flight is $135. If the flight is overbooked, the airline has a policy of getting the customer on the next available flight and giving the person a free round-trip ticket on a future flight. The cost of this free round-trip ticket averages $218. Super Discount considers the cost of flying the plane from New York to Los Angeles a sunk cost. By how many seats should Super Discount overbook the flight? Use Excel's NORM.S.INV() function to find the z value.
Next week, Super Discount Airlines has a flight from New York to Los Angeles that will be booked to capacity. The airline knows from history that an average of 25 customers (with a standard deviation of 15) cancel their reservation or do not show for the flight. Revenue from a ticket on the flight is $125. If the flight is overbooked, the airline has a policy of getting the customer on the next available flight and giving the person a free round-trip ticket on a future flight. The cost of this free round-trip ticket averages $250. Super Discount considers the cost of flying the plane from New York to Los Angeles a sunk cost. By how many seats should Super Discount overbook the flight? Note: Use Excel's NORM.S.INV() function to find the z value. Round z value to 2 decimal places. Round your answer to the nearest whole number.
A warehouse manager at Mary Beth Marrs Corp. needs to simulate the demand placed on a product that does not fit standard models. The concept being measured is "demand during lead time," where both lead time and daily demand are variable. The historical record for this product, along with the cumulative distribution, appear in the table. Demand During Lead Time Cumulaive Probability Probability 120 0.01 0.01 140 0.12 0.13 160 0.35 0.48 180 0.20 0.68 200 0.04 0.72 220 0.08 0.80 240 0.20 1.00 The following random numbers have been generated: 9, 78, 40, 41, and 99. (Note: Assume the random number interval begins at 01 and ends at 00.) Based on the given probabilty distribution, for the given random number the demand during the lead time is: Random Number 9 78 40 41 99 Demand The average demand during the lead time is (enter your response as an integer). The total demand during the lead time based on the five simulations is (enter your response as an integer).
A small medical supply company sells cash only, the cash sale procedure involves several steps:- The sales clerkprepares apre-numbered sales invoice in triplicate. The sales clerk takes copy 1 and 2 together with the payment and present them to the cashier. The cashier validates the original copy and gives it to the customer. The third copy of the sales invoice staysin the invoice book when the invoice book has been depleted all 3rdcopy of the invoices is filed in the sales office. “by invoice books”. At the end of each day the cashier prepares a Sales summary, a deposit slip in duplicate and counts the cash. He or she takesthe cash tothe Bank and deposit it.The cashier retains a copy of the deposit slip the other copy is validated by the bank. The cashier then gives the accountant the sales summary, the 2nd copy of the invoices and the validated deposit slip. The accountant agrees the numbers prepare the journal entry Files the documents as follows Sales summaries by date Invoices…
You have been asked to help a manufacturing firm that produces a variety of specialty components for local auto speed shops. The firm orders a number of components from suppliers, but the one they have asked you to analyze is special welding rod. Historical data suggests daily consumption of these rods can be modeled by a normal distribution with a mean and standard deviation of 42.3 and 5.1 bolts per day, respectively. The rods come in boxes of 5 rods/box, and the supplier will only ship in box quantities. It takes 2 days to receive an order from the supplier. You may assume that the daily demands are independent and identically distributed, and that inventory position is always known (i.e., continuous review). 1. The current policy is the order thirty boxes from the supplier when inventory position reaches ten boxes. What is the long run fraction of stock outs associated with the current strategy? 2. Assume the cost to place an order is $5 and holding is estimated to be…
You are a newsvendor selling the New York Times every morning. Before you get to work, you buy the day’s newspaper for $0.90 a copy. You sell a copy of the New York Times for $4.0. Daily demand is distributed normally with a mean of 130 and a standard deviation of 20. At the end of each morning, any leftover copies can be sold to a recycling center for $0.10. How many copies of the New York
The last two weeks of December are usually slow for room sales, but a local Snow and Ice Festival will attract visitors who may request reservations for single overnight accommodations. What policy should the hotel develop for accepting such room reservations
Problem 12-37 (Algo) A small grocery store sells fresh produce, which it obtains from a local farmer. During the strawberry season, demand for fresh strawberries can be reasonably approximated using a normal distribution with a mean of 36 quarts per day and a standard deviation of 5 quarts per day. Excess costs run 50 cents per quart. The grocer orders 41 quarts per day. Use Table. What is the implied cost of shortage per quart? (Round your z value to 2 decimal places, your service level probability to 4 decimal places and your final answer to 2 decimal places.) Shortage cost per quart
Wholemark is an Internet order business that sells one popular New Year's greeting card. The cost of the paper on which the card is printed is $0.10 per card, and the cost of printing is $0.42 per card. The company receives $2.40 per card sold. Since the cards have the current year printed on them, unsold cards have no salvage value. Based on past data, the number of customers from Los Angeles is normally distributed with a mean of 2,500 and a standard deviation of 600. What is the optimal production quantity for the card for Los Angeles, if Wholemark only makes a one-time production for this area? Round to the nearest integer.
That One Book sells its books through The Witch and the Wardrobe bookstores. It costs That One Book $0.80 to print each book; it sells the book to The Witch and the Wardrobe for $2.50. The Witch and the Wardrobe then sells the books at retail for $6.00. Whatever doesn’t sell gets thrown away. Demand for the book each issue is normal with a mean of 5219 and a standard deviation of 1610. To give The Witch and the Wardrobe incentive to order more books, it proposes a revenue-sharing contract. Instead of selling the book to The Witch and the Wardrobe for $2.50, That One Book will sell its books to The Witch and the Wardrobe for only $1.00. However, for each book that The Witch and the Wardrobe sells at retail, The Witch and the Wardrobe must give $2.00 back to That One Book. With this revenue sharing agreement in place, what is the optimal order amount that will maximize The Witch and the Wardrobe expected profit? Please do fast ASAP
Hotel ReservationsA hotel near the university always fills up in the evening before football games. History has shown that when the hotel is fully booked, the number of last-minute cancellations has a mean of 5 and a standard deviation of 3. The average room rate is $80. When the hotel is overbooked, the policy is to find a room in a nearby hotel and to pay for the room for the customer. This usually costs the hotel approximately $200 because rooms booked on such late notice are expensive. How many rooms should the hotel overbook?

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