. Fare Structure:
- Concept: Setting a fare structure that is both fair to passengers and sustainable for operators involves mathematical calculations.
- Mathematical Tools: Regression analysis can be used to determine the relationship between distance traveled and fare. Elasticity of demand, which measures how sensitive passenger demand is to fare changes, can also be analyzed using mathematical models.
b. Revenue Management:
- Concept: Ensuring that fare revenue covers operational costs and provides a profit requires careful financial planning.
- Mathematical Tools: Financial models and forecasting techniques can be used to predict revenue based on different fare structures, passenger volumes, and operational costs.
