Exotic Adventures, Inc. The Amazon Voyage

1392 words - 6 pages

Exotic Adventures, Inc.: The Amazon Voyage Case AnalysisCase SynopsisThe following is an analysis of the case, Exotic Adventures Inc.: The Amazon River Voyage. It details why tour operator, Exotic Adventures, Inc. (EAI) should proceed with their tours on the Amazon River between Brazil and Peru amidst concerns. Brazilian agents are reporting that low level waters may jeopardize an upcoming tour while Peruvian agents on the other hand, are suggesting that all would be fine to proceed with the tour. The analysis includes data analyzing costs involved and whether or not it would be profitable for EAI to proceed with the entire tour plans, shorten the voyage midway by turning back at Manaus or cancel it just days before and refund passengers their fares.Assignment QuestionWith just five days left before passengers leave their homes for the voyage, considering all information presented to Exotic Adventures Inc. including weather, costs and savings, and analyzing all of the options using the Decision Tree Model graph analysis, what is the optimal decision that Exotic Adventures Inc. should make regarding the tour?Case AnalysisExotic Adventures, Inc. which operates expedition voyages via vessels in different regions including Brazil and Peru, planned a tour down the Amazon River between Belem, Brazil and Iquitos, Peru during the month of October. The tour is described as adventurous and educational because passengers get to see much of nature's plant and wildlife up close in a comfortable boat designed to manoeuvre down rivers once water levels were high enough to accommodate the vessels' 14-foot drafts. The boats could accommodate up to 80 passengers.The EAI tour included a trip up the river and a return downstream. Since passengers would have to fly from their destinations to the beginning of the tour and lodge, the average price for each passenger is US$4,000.00. Two months before the planned October trip, EAI had booked 52 passengers on one way of the voyage and 47 passengers on the other. With this amount of passengers, EAI would profit slightly above the break even mark.As time got closer to the planned October trip, EAI began receiving reports from their agents in Brazil of unusually low water levels due to the El Nino weather system. By late September, the Brazilian agents had advised EAI that because water levels were fluctuating between 12 and 14 feet, a depth too low for the vessel to safely sail, their pilots would not be able to navigate the vessel past Manaus which is the midway point of the voyage. While Brazilian agents were expressing such concerns to EAI, Peruvian agents were noting just the opposite to EAI officials. According to them, everything was alright as their pilots were operating vessels with drafts of 14 feet on the river. Both sides considered the economic advantages for them if the tour remained...

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