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The question that plagued Exotic Adventures Inc is whether to cancel a South American tour on October 8. What are the ramifications of cancelling the trip prior to October 8, cancelling the trip after Manaus, turning around before Iquitos, or completing the upstream tour? Case Analysis
Exotic Adventures Inc. (EAI) is a travel company that operates expedition-style voyages mainly to Polar Regions. EAI also offered voyages between season to the islands of the South Pacific and the Atlantic also covering the Amazon River. The company decided to offer these additional excursions to assist in defraying fixed business cost (Shaw & Hulland, 1999). EAI first began excursions through the Amazon River Basin during the high water season of March 1997. There were two options; option one was the upriver voyage from Belem, Brazil to the town of Iquitos, option two was a downstream voyage from Iquitos to Belem, Brazil (Shaw & Hulland, 1999). The company then became convinced that it would be good to offer tours during the low water seasons, which for this area happens in October. This would offer tourist a greater opportunity to view the local wildlife, which during the high water season would normally retreat inland away from the river’s edge (Shaw & Hulland, 1999). After conducting analysis of the low water season, it was discovered that the water was normally no lower than 18 feet deep. The vessels with a 14-foot draft provided EAI with information on whether their ships could safely navigate the channel. EAI decided to proceed with tours during the low water season of October. The company then decided to add the tour to their 1998/99 brochure (Shaw & Hulland, 1999). Seeing the success in adding the low water tour, the company had seen...
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