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Operations Management
Southeastern Airlines's daily flight from Atlanta to Charlotte uses a Boeing 737, with all-coach seating for 120 people. In the past, the airline has priced every seat at $142 for the one-way flight. An average of 79 passengers are on each flight. The variable cost of a filled seat is $26. Aysajan Eziz, the new operations manager, has decided to try a yield revenue approach, with seats priced at $82 for early bookings and at $187 for bookings within 1 week of the flight. He estimates that the airline will sell 67 seats at the lower price and 34 at the higher price. Variable cost will not change. Total S contribution in the single price approach is $ (enter your response as a whole number). Total S contribution in the two price points approach is $ (enter your response as a whole number). Which approach is preferable to Mr. Ezlz? O A. Proposed model - two price points O B. Current model - single price

Southeastern Airlines's daily flight from Atlanta to Charlotte uses a Boeing 737, with all-coach seating for 120 people. In the past, the airline has priced every seat at $142 for the one-way flight. An average of 79 passengers are on each flight. The variable cost of a filled seat is $26. Aysajan Eziz, the new operations manager, has decided to try a yield revenue approach, with seats priced at $82 for early bookings and at $187 for bookings within 1 week of the flight. He estimates that the airline will sell 67 seats at the lower price and 34 at the higher price. Variable cost will not change. Total S contribution in the single price approach is $ (enter your response as a whole number). Total S contribution in the two price points approach is $ (enter your response as a whole number). Which approach is preferable to Mr. Ezlz? O A. Proposed model - two price points O B. Current model - single price

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Southeastern Airlines's daily flight from Atlanta to Charlotte uses a Boeing 737, with all-coach seating for 120 people. In the past, the airline has priced every seat at $142 for the one-way flight. An average of 79 passengers are on each flight. The variable cost of a filled seat is $26. Aysajan Eziz, the new operations manager, has decided to try a yield revenue approach, with seats priced at $82 for early bookings and at $187 for bookings within 1 week of the flight. He estimates that the airline will sell 67 seats at the lower price and 34 at the higher price. Variable cost will not change. Total S contribution in the single price approach is $ (enter your response as a whole number). Total S contribution in the two price points approach is $ (enter your response as a whole number). Which approach is preferable to Mr. Eziz? O A. Proposed model - two price points O B. Current model - single price
Transcribed Image Text:Southeastern Airlines's daily flight from Atlanta to Charlotte uses a Boeing 737, with all-coach seating for 120 people. In the past, the airline has priced every seat at $142 for the one-way flight. An average of 79 passengers are on each flight. The variable cost of a filled seat is $26. Aysajan Eziz, the new operations manager, has decided to try a yield revenue approach, with seats priced at $82 for early bookings and at $187 for bookings within 1 week of the flight. He estimates that the airline will sell 67 seats at the lower price and 34 at the higher price. Variable cost will not change. Total S contribution in the single price approach is $ (enter your response as a whole number). Total S contribution in the two price points approach is $ (enter your response as a whole number). Which approach is preferable to Mr. Eziz? O A. Proposed model - two price points O B. Current model - single price
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