WINTER 2007 MGTSC 352 LEC B1 > DOCUMENTS > LABS > LAB 4 -
SIMULATION (SASKAIR)
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Lab4_SaskAir
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Lab 4 - Simulation
February 9, 2007
1.
Problem Outline
2.
Difference between average demands
3.
Creating simulated demands
You are the operator of a new airline, SaskAir, a counterpart to Air Alberta. Your decision making aims to predict their profits for the upcoming year. Currently, you plan to offer flights between Saskatoon, SK and Salt Lake City, Utah. You have determined that a competitive price for these flights is $300. You currently own 1 plane that seats 100 passengers and based on current conditions it is expected to cost $21,600 for the flight, no matter how many passengers there are on board.
Provided for you is a list of a trial of 100 flights that were ran between July 1 and
October 31, 2005.
Q1: What is the average number of passengers who flew with the airline and what

is the standard deviation for passengers per flight? What was the average profit per flight during the trial period?

SaskAir would now like to consider leasing a different sized plane. Their options are as follows:
Passengers
100
110
Cost per flight
21,600
23,500
Also we have determined that the cost of turning away a customer because the plane is fully booked is $450, since we offer them a free flight and also receive poor customer satisfaction.
Please simulate 100 flights to determine which size of airplane they should purchase in order to maximize profits. You can use the following characteristics of

demand to set up your model:
Average
St deviation
Weekday
86
12 a) Why can we not use the simulation for Q1 as our average profit calculation for the 100 passenger plane option?
See answer at bottom b) Why are the average and standard deviation numbers not the same as what we calculated in Q1?
See answer at bottom c) What is the average profit for the different planes? What is the min and max profit for the different planes? What plane size do you suggest?

Determine passenger load:
Is demand met?
Now we calculate income from the flight:

Setting up the simulation table:
First set up top row of table. This is linked to the information you want to calculate. Here we want net income:
Next highlight the range of the table then Data > Table

There is no row input, and for column input we just select any blank cell on the active worksheet.

All that's left is to calculate the average profits from the simulation for the two different sized planes.
To find the min and max we can manually look through or we can use the min and max functions with conditional formatting.
We will go through using the demand for the plane with a capacity of 100. First we will select the range that we want Excel to evaluate which is the demand simulated for the 100 plane. Then selection conditional format which is found in
Format --> Conditional Formatting

The we add what conditions we would like to see. We want to change what the cells look like when they are equal to the min and max. We can adjust the backgrounds through Format ---> patterns. There are many ways you can change the format. Play around with it and see if you can make it bold, add a boarder. You can really go as crazy as you like with it.

What looks like the better plane size using the average profit - the 100 or 110 capacity plane?
Answers: a) We cannot use the simulation for Q1 to calculate Q2 because the number of passengers has been frozen and we do not have the formula that was used to create the simulation. This is a problem because we need to adjust the formula to remove the ceiling restricting the amount of passengers to less than or equal to
100.
b) We cannot use the previous average calculated because this is the average number of passengers on the plane and not the average demand. Demand follows a different distribution curve. Remember that the plane has a max capacity of 100.