ACCTG 331 Revenue and Cost Management

Part 1: EMSR and Linear ProgrammingSpringOut!dance studios areholding a swing dance and jazzfairfeaturing local jazz artists and dancers. The fair will be held overthree nights. Tickets can be purchased on the day or in advance. Advance purchase tickets can be bought for one-night, two-nights, or three-nights and these areavailable at a lower price than door admissions on the night. Advance one-night tickets are available for any of the three nights. Advance two-night tickets are for successive evenings and commence on either night one or two.Capacity of the venue is 200 each night. Demand and prices for the tickets are presented in the tablebelow.TicketPriceExpected DemandNotesAdvance purchaseOne-night$7070Price and demand per night, for each of the three nightsTwo-nights$12030Starting night one$12030Starting night twoThree-nights$14010Starting night onePurchase on the dayTicket$100120Night oneTicket$10080Night twoTicket$100100Night threeTanya Kattel, the lead event organiser, has asked you to prepare some analyses to help her figure out how many of each ticket type to sell.Requireda)EMSR: Calculate protection levels and booking limits for each of the three nights.For the EMSRanalysis, Tania wants to meet demand for allthe two-night and three-night tickets. You therefore only need to calculate protection levels for tickets purchased on the day and booking limits for advance one-night tickets.Analyse each of the three nights separately.Model the demand for each ticket using a Poisson distribution. After taking into account two-night and three-night tickets sold, the capacity available each night is as follows:i.Night one: 160 capacityii.Night two: 130 capacityiii.Night three: 160 capacityb)Linear programming:Formulateand solve the linear programme using Excel and the Solver function.For this analysis, disregard theinformationabout EMSR and Tania’s requirements givenin Part.