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Case study on Tour plan

By :Ankita Aggarwal (211021) Hitesh Munjal(211054)

A local travel agent is planning a charter trip to a famous sea resort. The eight-day seven-night package includes the round trip fare, surface transportation, boarding and lodging and selected tour options. The charter trip is restricted to 200 persons and past experience indicates that there will not be any problem in arranging 200 passengers. The problem faced by the travel agent is to determine the number of Deluxe Standard and Economy tour packages to offer for this charter. All three of these plans each differ in terms of their seating and service for the flight, quality of accommodation, meal plans and tour options. The following table summarizes the estimated prices of the three packages and the corresponding expenses of the travel agent. The travel agent has hired an aircraft for a flat fee of Rs. 2,00,000 for the entire trip.

Per person price and costs for the three packages are as follows:
Tour plan Deluxe Standard Economy Price 10,000 7,000 6,500 Hotel costs 3,000 2,200 1,900 Meals and other expanses 4,750 2,500 2,200

In planning the trip, the following considerations must be taken into account: (i) At least 10 percent of the packages must be of the deluxe type (ii) Al least 35 percent but not more than 70 percent must be of the standard type (iii) At least 30 percent must be of the economy type (iv) The maximum number of deluxe packages available in any aircraft is restricted to 60 (v) The hotel desires that at least 120 of the tourists should be on the deluxe standard packages together
The travel agent wishes to determine the number of packages to offer in each type of trip so as to maximize the total profit.

Solution: Since the travel agent wishes to maximize profit so our objective function is maximize Z=[price (hotel cost+ meals)]-flat fee for the charted aircraft Max Z=(10000-(3000+4750)) X1 +(7000-(2200+2500)) X2 +(6500(1900+2200)) X3 -2,00,000 or Max Z= 2250 X1 + 2300 X2 + 2400 X3 -2,00,000 where X1= number of deluxe packages X2= number of standard packages X3= number of economy packages

subject to constraints X1 + X2 + X3 =200 or X1 >=10% of (X1 + X2 + X3 ) 0.9X1 0.1 X2 0.1 X3 >= 0 35% of (X1 + X2 + X3 )<= X2 0.65 X2 0.35 X1 0.35 X3 >=0 X2 <= 70% of (X1 + X2 + X3) 0.7X3 + 0.7X1 0.3X2 >=0 X3 >= 30% of (X1 + X2 + X3) 0.7X3-0.3X1-0.3X2>=0

(1)

(2)

or

(3)

or

(4)

or

(5)

X1 <=60
X1 + X2 >= 120 X1 , X2 , X3 >=0

(6)
(7) (8)

Since X1 + X2 + X3 =200 , X3 =200- X1 - X2 Substituting Value of both in the Objective function and set of constraints, we get Max Z= -150 X1 -100 X2 + 280000 X1 >=20 X2 >=70 X2 <=140 X3 >=60 or X1 + X2 <=140 X1 <=60 X1 + X2 >=120 (1) (2) (3) (4) (5) (6)

Evaluating the Five extreme points:

Extreme point

Coordinates

Objective function Z= -150X1 -100X2 +280000 267000 265500 264000 263000 265000

A B C D E

(20,100) (50,70) (60,70) (60,80) (20,120)

Thus, evaluating the graph we get maximum at (20,100). So , X1 =20 X2 =100 X3= 200-20-100=80 And maximum profit that the travel agent can earn is=267000