Question

tleApplications+of+L Scenario Freedom Airlines recently started operations in the Southwest. The airline owns two airplanes, one based in Phoenix and the other in Denver. Each airplane has a coach section with 140 seats available. Each afternoon, the Phoenix based airplane flies to San Francisco with stopovers in Las Vegas and in San Diego. The Denver-based airplane also flies to San Francisco with stopovers in Las Vegas and in San Diego. Each airplane returns to its home-base with no stopovers. Freedom Airlines uses two coach-fare classes: A discount fare (A) and a fuIl fare (B). Discount fares are available with a 21-day advance purchase. Full fares applied at any time, up to the time of the flight. Below is the daily fare and demand data for 15 selected Freedom Airline itineraries Itineraries 1 through 6 apply to the Phoenix based airplane (leg 1) itineraries 7 through 12 apply to the Denver based airplane (leg 2); itineraries 13 and 14 apply to the Phoenix based airplane (leg 3); itineraries 15 and 16 apply to the Denver based airplane (leg 4)

Answer 1

Hey there, here's your answer:

Leg 1
1	Phoenix	Las Vegas	A	$180.00	50	9000
2	Phoenix	San Diego	A	$270.00	40	10800
3	Phoenix	San Francisco	A	$230.00	35	8050
4	Phoenix	Las Vegas	B	$380.00	15	5700
5	Phoenix	San Diego	B	$460.00	10	4600
6	Phoenix	San Francisco	B	$560.00	15	8400
			Max Revenue			46550
			Operating Cost =			20250
			Operating Profit			26300
Leg 2
7	Denver	Las Vegas	A	$200.00	50	10000
8	Denver	San Diego	A	$250.00	45	11250
9	Denver	San Francisco	A	$350.00	40	14000
10	Denver	Las Vegas	B	$385.00	15	5775
11	Denver	San Diego	B	$445.00	10	4450
12	Denver	San Francisco	B	$580.00	10	5800
			Max Revenue			51275
			Operating Cost =			19750
			Operating Profit			31525
Leg 3
13	San Francisco	Phoenix	A	$250.00	70	17500
14	San Francisco	Phoenix	B	$600.00	10	6000
			Max Revenue			23500
			Operating Cost =			20500
			Operating Profit			3000
Leg 4
15	San Francisco	Denver	A	$325.00	50	16250
16	San Francisco	Denver	B	$585.00	10	5850
			Max Revenue =			22100
			Operating Cost =			19500
			Operating Profit			2600

Total Operating Profit for freedom airlines = summation of operating profits of all 4 legs:

=26300 + 31525 +3000 + 2600

= $63425

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