OPERATIONS MANAGEMENT: SUSTAIN ACCESS C
13th Edition
ISBN: 9780135662076
Author: HEIZER
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 13, Problem 1.2VC
Summary Introduction
Case summary:
Many companies including Company OM tried to implement dynamic pricing in their ticketing system. The dynamic pricing based on the popularity and the number of games is as follows:
| Popularity rating of opponent | Number of games | Price |
| Tier I | 3 | $187 |
| Tier II | 3 | $170 |
| Tier III | 4 | $85 |
| Tier IV | 6 | $75 |
| Tier V | 14 | $60 |
| Tier VI | 9 | $44 |
| Tier VII | 6 | $40 |
| Average | 45 | $68 |
Company OM has a capable revenue management technique. It follows three different types of pricing strategy, which are the setting price during the beginning of the season and do not change throughout the season, setting a price based on the popularity of an opponent, and pricing the tickets based on the projected demand and the changing based on the actual market demand.
Person P and Person D of Company OM use different tools to change the seat price based on the demand. Company OM would provide offer prices and seats at a prime rate in the existing games.
To determine: The change in the profit contribution for the 45-game season change.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
QUESTION 2
In the airline market, vacation-traveler customers have a more elastic demand than business-traveler customers, although the marginal cost of serving either type of customer is the same. If the airline companies engage in price discrimination, which customers end up paying a higher price?
Vacation-traveler customers.
Prices will be the same because the marginal costs are the same.
There is not enough information to answer. We also need to know the average cost of serving each type of customer.
Business-traveler customers.
QUESTION 3
A seller engages in price discrimination by market segment. Morning customers have a price elasticity of demand E = -2, while evening customers have a price elasticity of demand E = -3. The MC of selling to both groups is the same and constant at $100. Therefore:
morning customers will pay P=$400, while evening customers will pay $300.
morning customers will pay P=$400, while evening…
Question 4) APP Linear Programming
Given the following information:
Quarter Demand
Regular Prod. Capacity = 3,000 units/gt
8,000 Overtime Prod. Capacity = 800 units/gtg
4,000 Subcontracting Capacity = 1,800 units/gt
Regular Prod. Cost = $20/unit
Overtime Prod. Cost = $25/unit
1
2
2,000 Inventory Capacity
= 6,000 untis/atr
Subcontracting Cost = $35/unit
Inventory Cost
3
Beginning Inventory
= 500 units
= $4/unit/gtr
Linear programming is to be used to determine a production plan strategy of Level Production,
Overtime, and Subcontracting.
a. Formulate the Objective Function (note that there are 3 quarters).
b. Formulate all Constraints (standardized).
c. How many decision variables are in the model?
d. How many constraints are in the model? (do not include non-negativity constraints)
Question 3
Heman Company has three production plants in P1, P2, and P3 and two warehouses W1
and W2. The capacities of the three production plants during the next year are 450, 600, and
380. The demands at the two warehouses are 650 and 780 cars.
The cost chart between the production plants and the warehouses is given:
COST Chart
W1
W2
P1
$6
$4
P2
$3
$6
P3
S7
$8
Formulate an initial feasible solution to Heman Company's problem using the Northwest-
Corner Rule. Then evaluate each unused shipping route by computing all improvement
indices using Stepping-Stone Method. Is the solution optimal?
Chapter 13 Solutions
OPERATIONS MANAGEMENT: SUSTAIN ACCESS C
Ch. 13 - Prob. 1DQCh. 13 - Why are SOP teams typically cross-functional?Ch. 13 - Prob. 3DQCh. 13 - Prob. 4DQCh. 13 - Prob. 5DQCh. 13 - Prob. 6DQCh. 13 - Question: 7. What is level scheduling? What is the...Ch. 13 - Question: 8. Define mixed strategy. Why would a...Ch. 13 - Prob. 9DQCh. 13 - Prob. 10DQ
Ch. 13 - Question: 11. What is the relationship between the...Ch. 13 - Prob. 12DQCh. 13 - Question: 13. What are major limitations of using...Ch. 13 - Prob. 14DQCh. 13 - Question: 13.1 Prepare a graph of the monthly...Ch. 13 - Prob. 2PCh. 13 - The president of Hill Enterprises, Terri Hill,...Ch. 13 - Prob. 4PCh. 13 - Prob. 5PCh. 13 - Prob. 6PCh. 13 - Prob. 7PCh. 13 - Prob. 8PCh. 13 - Prob. 9PCh. 13 - Question: 13.10 The SOP team (see Problem 13.9)...Ch. 13 - Prob. 11PCh. 13 - Prob. 12PCh. 13 - Prob. 13PCh. 13 - Question: 13.14 Jerusalem Medical Ltd., an...Ch. 13 - Prob. 15PCh. 13 - Prob. 16PCh. 13 - Prob. 17PCh. 13 - Question: 13.18 Jose Martinez of El Paso has...Ch. 13 - Prob. 19PCh. 13 - Prob. 23PCh. 13 - Prob. 24PCh. 13 - Prob. 25PCh. 13 - Prob. 26PCh. 13 - Prob. 1CSCh. 13 - Prob. 2CSCh. 13 - Prob. 1.1VCCh. 13 - Prob. 1.2VCCh. 13 - Question: 3. What are some concerns the team needs...
Knowledge Booster
Similar questions
- Question 2 Mike is a first year university student who is trying to understand his financial situation. Mike currently lives 1.5 miles away from campus. He works part time in a retail centre that pays him £800 per month. Mike saves £200 out of the part time job pay for his further education plan. a). As to the below Travel Expenses table published by the Students’ Union, 185 students were randomly selected to help understand the travel expenses and distance to campus. What’s the probability for Mike to spend over £10 on journeys to campus? Distance to Campus (miles) Amount spent, £ 0.1 to 0.25 0.26 to 1.0 Over 1.0 0 – 4.99 35 26 10 5.00 – 9.99 18 39 20 10.00+ 4 14 19 b). How much is the frequency for students living over 1 mile away from the campus? c). As to the category of Amount Spent, £, what is the modal group? d). Assuming Mike is saving the same amount per month in the next 3 years. How much does Mike get for his saving…arrow_forwardQuestion 4. A firm's manager must decide whether to make or buy a certain item used in the production of vending machines. Making the item would involve annual lease costs of $150,000. Cost and volume estimates are as follows: Make Buy Annual fixed cost $150,000 None Variable cost/unit 60 $ 80 Annual volume (units) 12,000 12,000 a. Given these numbers, should the firm buy or make this item? b. There is a possibility that volume could change in the future. At what volume would the manager be indifferent between making and buying?arrow_forwardQuestion 3 (Module 2): In the past, Arup Mukherjee's tire dealership in Sudbury sold an average of 1,000 radials each year. In the past two years, 200 and 250, respectively, were sold in fall, 350 and 300 in winter, 150 and 165 in spring, and 300 and 285 in summer. With a major expansion planned, Mukherjee projects sales next year to increase to 1,200 radials. What will be the demand during each season?arrow_forward
- Question content area Part 1 Maria manages a bakery, that specializes in ciabatta bread, and has the following information on demand and costs: Ciabatta Bread Sold Per Hour (Q) Price (P) Total Cost (TC) 0 $6.00 $1.50 1 5.50 5.50 2 5.00 8.50 3 4.50 11.00 4 4.00 13.00 5 3.50 14.50 6 3.00 15.50 7 2.50 17.00 8 2.00 19.50 Part 2 a. To maximize profits, Maria should sell enter your response here loaves of ciabatta bread per hourarrow_forwardQuestion 02 Mr. Rahman is the CEO of Rider Inc. a ride sharing, digital ticketing and reservation platform for public transport. Right now, they collaborate with the AC bus services on a few routes only. However, they want to start their own transport services on a new route. To run this operation, it requires leasing a few buses for monthly payments of 50000 taka/year. Variable costs would be 50 per/ticket. Each ticket will be sold to customers at an average price of 70taka. What would be the profit/loss if 3000 tickets are sold per year? How many tickets per year should be sold in order to break even? What volume is needed to obtain a profit of 20000 taka per year? If 2300 tickets can be sold and a profit target is 15000 taka, what price should be charged per ticket? If the buses have design and effective capacities of 10,000 and 5000 customers per year, respectively, and only 3000 customers/year use these buses during pandemic, what will be the utilization of the holding area?arrow_forwardQuestion 02 Mr. Rahman is the CEO of Rider Inc. a ride sharing, digital ticketing and reservation platform for public transport. Right now, they collaborate with the AC bus services on a few routes only. However, they want to start their own transport services on a new route. To run this operation, it requires leasing a few buses for monthly payments of 50000 taka/year. Variable costs would be 50 per/ticket. Each ticket will be sold to customers at an average price of 70taka. If the buses have design and effective capacities of 10,000 and 5000 customers per year, respectively, and only 3000 customers/year use these buses during pandemic, what will be the utilization of the holding area?arrow_forward
- Question 2 Cranergy Products is a cranberry cooperative that operates two divisions, a harvesting division and a processing division. Currently, all of harvesting's output is converted into cranberry juice by the processing division, and the juice is sold to large beverage companies that produce cranberry juice blends. The processing division has a yield of 500 gallons of juice per 1,000 pounds of cranberries. Cost and market price data for the two divisions are as follows: Harvesting Division Variable cost per pound of cranberries Fixed cost per pound of cranberries Selling price per pound of cranberries in outside market Processing Division Variable cost per gallons of juice produced Fixed cost per gallons of juice $0.14 $0.32 $0.26 $0.50 $0.58 Selling price per gallons of juice $2.15 Required: 1. Compute Cranergy's operating income from harvesting 420,000 pounds of cranberries and processing them into juice. 2. Cranergy rewards its division managers with a bonus equal to 3% of…arrow_forwardQuestion 4 Belhana Restaurant Company operates a chain of branches at Alexandria and they like to start a new branch at north coast. The demand will be low, medium, or high; with probabilities are 0.2, 0.3 and 0.5, respectively. If they start a small branch that sells only take away sandwiches, the associated net payoffs are EGP 25,000; 30,0003; and 80,000 for low, medium, and high demand. If the company chooses an expanded facility that offers take away sandwiches and fast foods, it must build a new building and rent additional area. The net payoffs for an expanded facility are EGP (80,000), (27,000), and 48,000. Required: • Draw a decision tree for this case • What should the company do to maximize the net payoff?arrow_forwardQuestion: Retail Channel: David can run the business fully online then he does not need to rent the facility. Alternatively, he can run the business in hybrid model (online as well as through traditional brick-and-motor channel). What will be the possible benefits and challenges for Food-Town to take the options (fully online or hybrid)? Can you solve this question for me which is linked with case study? This subject is about RETAIL AND SERVICE LOGISTICS. Please make sure to read the case study. I also provided the case study in image. Please just write in 150 words.arrow_forward
- Question 1. Hoverboards and the Factory Market Area: Suppose there is a single shoe factory in the region. The factory competes with homemade shoes and will sell shoes to any household for which the net price of factory shoes is less than the cost of homemade shoes. The cost of a homemade shoe is the opportunity cost of the time required to make the shoe at home, that is, the one gallon of milk that could be produced instead. Suppose the higher cost of living and commuting requires compensation of 0.80 gallons of milk per hour. Each worker produces 10 shoes per hour, so the average labor and capital cost are 0.18 gallons of milk and 0.12 gallons of milk respectively. The factory price of shoe (equal to the average production cost, sum of the average labor cost and the average capital cost) is 0.30 gallons of milk. A round-trip mile involves one mile of travel to a location and one mile back, for a total distance of two miles. Linear travel cost 20 miles /hour. Therefore, the…arrow_forwardQUESTION 2 NAK Consult Ltd is a construction company with many contracts being executed concurrently. A large number of workers are on various construction sites. NAK Consult Ltd has an internal audit department and the team is currently reviewing cash wages systems within the company. The following information is available concerning the wages systems: • Workers on each site are controlled by a foreman. The foreman has a record of all employee numbers and can issue temporary numbers for new employees. • Any overtime is calculated by the computerized wages system and added to the standard pay. • The two staff in the wages department make amendments to the computerized wages system in respect of employee leave, illness, as well as setting up and maintaining all employee records. • The computerized wages system calculates deductions from gross pay, such as employee taxes (PAYE), and other statutory deductions. • Finally, a list of net cash payments for each employee is produced. Cash is…arrow_forwardModule 5 Question 6 The owner of the Petreno Pharmaceutical Company is evaluating the expected annual sales for a new line of facial care products and estimates that there is a 60 percent chance that the product line will be extremely successful, in which case it will generate sales next year of 8.0 million. However, since the new product line has a unique appeal that will require substantial advertising by its manufacturer to gain consumer acceptance, there is a 40 percent chance that revenues for next year will be a modest 1.0 million. What is the expected level of revenues for the new product line? The expected total revenue for the new line of products is $ ___ millionarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,
Operations ManagementOperations ManagementISBN:9781259667473Author:William J StevensonPublisher:McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi...Operations ManagementISBN:9781259666100Author:F. Robert Jacobs, Richard B ChasePublisher:McGraw-Hill Education
Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage Learning
Production and Operations Analysis, Seventh Editi...Operations ManagementISBN:9781478623069Author:Steven Nahmias, Tava Lennon OlsenPublisher:Waveland Press, Inc.
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,
Operations Management
Operations Management
ISBN:9781259667473
Author:William J Stevenson
Publisher:McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi...
Operations Management
ISBN:9781259666100
Author:F. Robert Jacobs, Richard B Chase
Publisher:McGraw-Hill Education
Purchasing and Supply Chain Management
Operations Management
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Cengage Learning
Production and Operations Analysis, Seventh Editi...
Operations Management
ISBN:9781478623069
Author:Steven Nahmias, Tava Lennon Olsen
Publisher:Waveland Press, Inc.