Asked by Julian Jones on Jul 16, 2024
Verified
How many donkeys should the cruise line have in its herd?
A) 8,111
B) 7,977
C) 7,842
D) 7,707
Donkey Herd
A group of donkeys; often used contextually outside of agriculture to describe a collection or group with specific characteristics.
Corpulent Tourists
Overweight individuals who travel for pleasure or leisure.
Cruise Line
is a company that operates cruise ships, offering vacation and travel services across various destinations and oceans.
- Comprehend the function of revenue management in optimizing profits within the supply chain.
Verified Answer
LM
Lauren MullinsJul 17, 2024
Final Answer :
B
Explanation :
The cruise line should aim to cover the demand for donkey rides up to a certain percentile of the normal distribution of tourist numbers to balance between the fixed cost of maintaining donkeys and the variable cost of renting additional capacity on the spot market. Given the cost structure, it's more economical to cover the majority of demand with owned donkeys and only resort to the spot market for unusually high demand. The correct number of donkeys corresponds to the demand level that optimizes this balance, which, based on the calculation method involving the normal distribution of tourist demand and the costs provided, is closest to the option provided as 7,977.
Learning Objectives
- Comprehend the function of revenue management in optimizing profits within the supply chain.
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