Airline Scheduling: Four aeroplanes had been leased by the company “Northwest Commuter”. The leasing cost for each aeroplane is $30,000 per day. At the end of the day, an aeroplane might remain in the city where it landed on its last flight. Another option is to fly empty overnight to another city to be ready to start a flight from there the next morning. The cost of this latter option is $5,000. The following table shows the 22 possible flights that are being considered for the coming year.
The last column gives the estimated net revenue (in thousands of dollars) for each flight, given the average number of passengers anticipated for that flight.
Identify the most profitable combination of flights (including some new ones) for the coming year that could feasibly be flown by the four aeroplanes. To simplify the analysis, assume for now that there is virtually no turnaround time between flights, so the next flight can begin as soon as the current flight ends. If an immediate next flight is not available, the aeroplane would wait until the next scheduled flight from that city.
Please refer to the above case: titled "Airline Scheduling". Analyse the decision problem in the case and prepare a handwritten report presenting your findings and recommendations.
Include the following items in your report:
• Formulation of the decision problem.
• Develop a spreadsheet model of the formulated problem and submit the softcopy to the MBA office.
• Consider having each of the four aeroplanes carry freight instead of flying empty if it flies overnight to another city to be ready to start a flight from there the next morning. Instead of a cost of $5,000, this would result in net revenue of $6,000. Adapt the spreadsheet model to find the feasible combination of flights that maximizes the total profit.
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