You are the director of an admission office. Your job every yearis to decide the number of offer letters to issue to undergraduatedegree applicants. For the academic year 2016/2017, the universityhas a capacity to enroll 7,200 undergraduate students, but youreceived more than 20,000 applications. However, you know from pastyear records many students also got offers from other good schoolsin Canada and the US. The yield rate for this university is farless than 100%.
Assume the university has spent large amount of sunk cost in itsundergraduate program for a designed capacity to enroll 7,200students, such as upgrading classrooms, expanding residentialhouses, hiring additional teaching instructors and administrationstaff. As the admission office director, you need to considerfollowing questions:
(a) Will you issue more than 7,200 offer letters for 2016/2017academic year?
(b) What is the trade-off between issuing more than 7,200 offerletters and issuing exactly 7,200 offer letters?
(c) How to determine the optimal number of offer letters toissue? What information do you need, and how to get suchinformation?
