Question: Consider a theme park that can accommodate 1,500 customers per day. The following table describes the base customer demand:

The manager of the park also knows that customers are price sensitive to other days prices as follows:

1. Weekend (Saturdays and Sundays) customers will switch to the other weekend day at a rate of 10 customers per $1 difference. They will not switch to weekdays at any price.
2. Weekday customers will switch to any other day (including a weekend day) at a rate of 8 customers for every $1 difference in price.

1. What are the optimal daily prices the theme park should charge?
2. What are the achievable revenues and daily utilization of the park?
3. The previous manager of the park is arguing that it is not worth considering these switches between different days and one can just assume independent demand (as given by the table). Can you make a case for or against her claim?

Price: $2.99

Solution: The downloadable solution consists of 4 pages
Deliverable: Word Document