Transcript MGQ301 Case2group.pptx

Mimi’s Orlando
Shuttle
By: Ryan Battistoni 37235815
Mahboob Alam 37383103
Leighton Barnes 37428586
Statement of Integrity
“The work presented herein is solely the work of the
group members stated on slide one. If we have left off
the name of any group member, intentionally or by
accident, that member will not receive credit for this
assignment. It is our original work and only our work. It
is work freshly created for MGQ 301 this semester. We
hereby state we received no help outside any provided
by our instructor. We promise we have not shared it
nor will we (EVER!). We understand and accept the
standard penalty for violations is an F in the Course.
We are fully aware that late assignments will not be
accepted. “
Problem
Mimi is being too conservative by not
overbooking her flights since the 10% chance
of passengers not showing up allows her to do
so.
Methodology
First we calculated Mimi’s current revenue
(based on 135 passengers) and expenses to
determine she was losing just over
16,000/week.Then by using Mimi’s given rate
of 90% attendance and using the binomial
distribution formula, we found by scheduling
more people than each plane fits, Mimi’s
revenue increases due to a higher average
attendance.
Yearly Expenses Vs Yearly Revenue
Expenses
Expense Cost ($)
Revenue (42,376,500) – Expenses
Lease
3,650,000
38,726,500
Pilots (6)
1,564,285.714
37,162,214.29
Attendants (12)
938571.4286
36,223,642.86
Fuel
25,595,625
10,628,017.86
Crew Members
2,102,400
8,525,617.857
Credit Card Charge
1,271,295
7,254,322.857
Taxes
3,449,250
3,805,072.857
Airport Fees
3,650,000
155,072.8574
Snacks
344,925
-189,852.1426
Insurance
650,000
-839,852.1426
Total= 43,216,352
Net Loss = 839, 852.1426
Recommendations
We recommend that Mimi books 157 passengers
per round trip because there is a 10% chance of
passengers not showing up. Therefore she would
have an average expected attendance of 141.3
passengers. The probability of overbooking when
she books 157 passengers is low (.003464),
where she can expect a problem 2.528726 times
per year. If more than 150 passengers show up
she gives them a free round trip ticket valid for a
year to keep their loyalty.