The goal when making the overbooking decision is to maximize supply chain profits by
A)maximizing the value of wasted capacity and the cost of capacity shortage.
B)maximizing supply chain profits.
C)minimizing the cost of wasted capacity and the cost of capacity shortage.
D)minimizing the cost of wasted capacity and minimizing capacity shortages.

Question

Quizplus · Accepted Answer

The goal of making overbooking decisions is to balance the cost of wasted capacity (having empty seats or rooms) with the cost of capacity shortages (turning away potential customers). By minimizing the cost of wasted capacity and the cost of capacity shortage, supply chain profits can be maximized. Therefore, choice C is the best option.

The Goal When Making the Overbooking Decision Is to Maximize