Group #16
Beibei Xiang
Phuc Nguyen
Yinghui Cui
Wenrui Zhang
Ezinne Akobundu
•
To find the best reservation strategy to
over-booked customers for Mimi.
•
Mimi is being too conservative by not
overbooking her flights since the 10% chance
of passengers not showing up allows her to
do so.
• Calculated Mimi’s current revenue and expenses.
We found out that she is losing over $15,500 per
week.
• We know that only 10% of the customers “noshows”, by using the binomial distribution
formula.
• Found out by overbooking her flights will
produce a higher revenue.
Revenue
Yearly ($)
Weekly ($)
Ticket Revenue
$45,201,600
$866,880
Expenses
Yearly
Weekly
Lease
$3,650,000
$70,000
Insurance
$925,000
$17,740
Fuel
$25,595,625
$490,875
Crew Members
$1,868,800
$35,840
Airport Fees
$5,475,000
$105,000
Pilots (6)
$1,877,143
$36,000
Attendants (12)
$1,251,429
$24,000
Credit Card Charge
$1,356,048
$26,006
Taxes
$3,679,200
$70,560
Snacks
$346,896
$6,653
Total Expenses
$46,025,141
$882,674
Total Loss
$823,541
$15,794
Reservations
Profit
Time between
overbookings
#overbooked % overbooked
flights/yr
flights/yr
To maintain customer satisfaction offer overbooked
passengers:
Approximate $______ package value
Reservations
Profit
Expected Loss
($1,000 Voucher Value)
We recommend that Mimi’s Orlando Shuttle adjust the
reservation strategy to allow a maximum of
________ reservations per flight.

________% of all flights per year are expected to
overbook (at the current 10% no show rate).

Even with an expected amount of $_____ in
overbooking expenses Mimi’s Orlando Shuttle can
expect see an increase of approximately
__________in revenue from current status.
QUESTIONS?