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A taxi company has a small limousine at the local airport with a seating capacity of four that makes one trip per day to a predefined location. The cost of each seat to the taxi company is estimated at $5 per seat (empty seats still cost $5). The price per seat to the customer is $10. The number of reservation requests per day X is Poisson distributed with parameter λ = 5 for x = 0,1,2... Assuming any reservation requests over four will go to rival limousine services (the reservation request becomes lost to this taxi company), find the expected net revenue per day. (Note: the limousine driver is still required to make the trip even if there are no customers to be seated).

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M91757816

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