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Masja [62]
3 years ago
11

Next week, Super Discount Airlines has a fight from New York to Los Angeles that will be booked to capacity. The airline knows f

rom past history that an average of 25 customers (with a standard deviation of 15) cancel their reservation or do not show for the fight. Revenue from a ticket on the fight is $125. If the fight 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 fight. 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 fight?
Business
1 answer:
ss7ja [257]3 years ago
5 0

Answer:

The cost of underestimating demand is considered a revenue loss that arises due to cancellation of flight costing $125. Hence, cost of underestimating the demand is, C_{u} = $125 .

The cost of overestimating the demand is known as rewards. For example. free round trip ticket worth $250. Hence. cost of overestimating the demand. C_{o} = $250 .

Denote the optimal probability of tickets not being sold by P. The expression is shown below:

P = \frac{C_{u} }{C_{o} + C_{u} }

P = \frac{125}{250 + 125}

P = 0.3333

Hence. the optimal probability that the tickets are not being sold is 0.33.

Apply the formula, NORMSINV (0.3333) in the Excel spreadsheet

The value of z is obtained as -0.4308. The negative value of z indicates that the number of seats to be overbooked must be less than an average of 25.

As per the stated question, an average of 25 customers cancel or do not show for the flight. Also the standard deviation is 15.

Calculate the number of seats by which company SD should overbook the flight.

= Value of z x Standard deviation

= -0.4308 x (15)

= -6.462

Subtract the value. 6 from the average customers that do not show up for the flight.

25 - 6 = 19 seats

Hence, the airlines should overbook the flight by 19 seats .

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In 2016, Chaya Corporation, an accrual basis, calendar year taxpayer, provided services to clients andearned $25,000. The client
Artemon [7]

Answer:

$27,333.33

Explanation:

The computation of the amount of income reported is shown below:

= Provided services to the customer + Payment received × number of months ÷ given number of months

= $25,000 + $12,000 × 7 months ÷ 36 months

= $25,000 + $2,333.33

= $27,333.33

The seven months is calculated from the June 1 to December 31. We assume the books are closed on December 31

7 0
2 years ago
China, India, Eastern Europe, and other developing countries have been sourcing hot spots. Explain why and also discuss any prob
Oksana_A [137]

Answer: The problem in outsourcing from low-cost country:

It is seeking goods and services beyond the border of a region. It is a process where organizations look for the most cost-effective place globally to manufacture their goods. Most organizations choose a global sourcing strategy as the cost is using lower abroad.

Explanation:

Outsourcing from low-cost countries a move by the company to cut costs as they have a huge presence of labor. It will allow them to concentrate on their core activities. But, there are some problems outsourcing from low-cost countries. Some are :

1. Sometimes the outsourcing does not provide the expected cost savings.

There might be new conflict and problem arising from different sources

2. There might be legal barriers present between the two different nations involved in outsourcing.

7 0
3 years ago
If your income is $40,000 and your income tax liability is $5,000, your marginal tax rate is a. 8 percent. b. 12.5 percent. c. 2
Dmitry_Shevchenko [17]

If your income is $40,000 and your income tax liability is $5,000, your marginal tax rate is: b. 12.5 percent.

Using this formula

Marginal tax rat=Tax payable/Taxable income×100

Where:

Tax payable=$5,000

Taxable income=$40,000

Let plug in the formula

Marginal tax rate=$5,000/$40,000×100

Marginal tax rate=12.5%

Inconclusion if your income is $40,000 and your income tax liability is $5,000, your marginal tax rate is: b. 12.5 percent.

Learn more here:brainly.com/question/18488309

3 0
3 years ago
As a pharmacist in your community, you are concerned with the level of service provided to those in need at odd hours and after
umka2103 [35]

I guess the correct answer is Making products and counseling available when consumers need them.

In the fact that you are concerned with the level of service provided to those in need at odd hours and after hours and in the neighborhoods where such extended service is needed, then your our concerns are centered on making products and counseling available when consumers need them.

3 0
2 years ago
Identify the statement that is incorrect. Multiple Choice Higher financial leverage involves higher risk. Risk is higher if a co
Irina-Kira [14]

Answer:

Risk is higher if a company has more assets.

Explanation:

All of the following statements are true and correct;

1. Higher financial leverage involves higher risk.

2. Risk is higher if a company has more liabilities.

3. The debt ratio is one measure of financial risk.

4. Lower financial leverage involves lower risk.

However, it is false and an absolutely incorrect to say risk is higher if a company has more assets.

A company having more assets would have a debt ratio less than one (1) because it has many assets to fund it's business. Thus, the company would have little or no debts and as such, it's risk portfolio is very low.

Hence, risk is lower if a company has more assets.  

8 0
3 years ago
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