Good Airline has a need for about 100 new flight attendants per month as replacements for those who leave. Trainees are put through a two-month school. The fixed cost of running one session of this school is $150,000. Any number of sessions can be run during the year, but must be scheduled so that the airline always has enough flight attendants. The cost of having excess attendants is simply the salary that they receive, which is $15,000 per month.
(a) How many sessions of the school should Ace Airline run each year, and how many flight attendants should be in each session?
(b) On any given day, how many trainees do you expect to find in school? Does that depend on the class size?
(c) We have implicitly assumed that Ace Airline starts paying the salary of $15,000 per month only at the end of the two-month school. Such a practice drew significant complaints from the trainees. Ace decided to change its practice and pay the trainees during the training session as well. How would the new policy change Ace's class size?
