Meega Airlines Decided to Offer Direct Service from Akron to Clearwater

question 50

Essay

Meega airlines decided to offer direct service from Akron to Clearwater beach, Florida. Management must decide between full-price service using a company's new fleet of jet aircraft and a discount-service using smaller capacity commuter planes. Management developed estimates of the contribution to profit for each type of service based upon two possible levels of demand for service on Clearwater beach: high, moderate, and low. The following table shows the estimated quarterly profits (in thousands of dollars):

a. If the demand probabilities are 0.3, 0.5, and 0.2, what is the best decision using the expected value approach?
b. Construct a risk profile for the optimal decision in part a. What is the probability of the profit exceeding $700,000?

---

Definitions:

Patent Infringement

The unauthorized use of a patented invention without permission from the patent holder.

Federal Court

Courts established under the federal government of the United States, having jurisdiction over matters not reserved to the states and interpreting federal laws, including the Constitution.

Patent Application

A request pending at a patent office for the grant of a patent for the invention described and claimed by that application.

Patent Infringement

Occurs when a third party makes, uses, sells, offers to sell, or imports a patented invention without the patent owner’s permission.