Coursework: Air Miles SchemesBackgroundThere are two airlines, BryanAir and OxygenAsia, which offer different air miles schemes. Each airlinehas different costs of air tickets and average number of passengers travelling. Your task is to write a reportwhich investigates the profitability of the schemes for each airline. You should also submit a separate Rscript which performs calculates the required quantities (see below). Your written report is worth 14 marksand your R script is worth 6 marks so the total assignment will be worth 6 marks.The SchemesLet D be the last digit of your Heriot-Watt student ID number (so this will be a numberbetween 0 and 9) and let k=D=5.Each airline has scheme whereby frequent flyers are rewarded for using the airline more by providingdiscounted air fares the more a member travels. Both airlines only allow passengers to make use of theirair miles on certain routes they operate so even if a passenger has saved up air miles, they may not beable to use those air miles for a particular route. For simplicity, we assume that passengers can only travelan integer number of miles in any year and hence can only save up an integer number of air miles.The air miles scheme operated by BryanAir is as follows:• When initially joining the scheme, a customer has 0 air miles.• Each year a member of the scheme pays $8.• In any given year, a member can choose whether or not to make use of their existing air miles.• Independently of all past years’ usage, with probability0:03(1-e(-i-1))(5+k)e-ma member of the scheme who currently has 100i air miles travels 100m miles (for m≥1 an integer)and does not make use of their existing air miles. Note that this case includes the possibility thatthe route the member wishes to fly on does not allow the usage of air miles and it also includes thecase where a member forgets to use air miles.• Independently of all past years’ usage, with probability 0:3e-m a member of the scheme who currentlyhas 100i air miles travels 100m miles (for 0
- Assignment status: Already Solved By Our Experts
- (USA, AUS, UK & CA PhD. Writers)
- CLICK HERE TO GET A PROFESSIONAL WRITER TO WORK ON THIS PAPER AND OTHER SIMILAR PAPERS, GET A NON PLAGIARIZED PAPER FROM OUR EXPERTS
