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Cost Allocation; Sharing Cab Fare Suppose there are three passengers sharing a single cabride and that passenger A’s usual fare to his destination would be $12, passenger B’s usual fare to herdestination would be $18, and passenger C’s fare would be $30. Because they are sharing the cab,and assuming no surcharge, the total cab fare is $30, rather than the $60 they would have had to payin total individually. So there is a $30 saving to sharing the cab.Required3. Explain how you would split the total cost of the cab fare and why. Are there other ways that could besensible and/or fair?

Cost Allocation; Sharing Cab Fare Suppose there are three passengers sharing a single cabride and that passenger A’s usual fare to his destination would be $12, passenger B’s usual fare to herdestination would be $18, and passenger C’s fare would be $30. Because they are sharing the cab,and assuming no surcharge, the total cab fare is $30, rather than the $60 they would have had to payin total individually. So there is a $30 saving to sharing the cab.Required3. Explain how you would split the total cost of the cab fare and why. Are there other ways that could besensible and/or fair?

Essentials of Business Analytics (MindTap Course List)
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter5: Probability: An Introduction To Modeling Uncertainty
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Problem 1P: On-time arrivals, lost baggage, and customer complaints are three measures that are typically used...
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Cost Allocation; Sharing Cab Fare Suppose there are three passengers sharing a single cab
ride and that passenger A’s usual fare to his destination would be $12, passenger B’s usual fare to her
destination would be $18, and passenger C’s fare would be $30. Because they are sharing the cab,
and assuming no surcharge, the total cab fare is $30, rather than the $60 they would have had to pay
in total individually. So there is a $30 saving to sharing the cab.
Required
3. Explain how you would split the total cost of the cab fare and why. Are there other ways that could be
sensible and/or fair?

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