By how many should this cheap-ticket airline overbook

Assignment Help Operation Management

Reference no: EM131918911

A popular Cheap-Ticket flight from New York (LGA) to Dallas (DFW) costs $120. From the past history, the airline knows that an average of 10 customers (with standard deviation of 4) cancel their reservation.

If the flight is overbooked, the airline has a policy to board customer on the next available flight and give the person a free round-trip ticket on a future flight.

The cost of free round-trip flight averages $180. By how many should this ‘Cheap-Ticket' airline overbook the flight (sale extra ticket)?

Step 1: Find the P-value (probability):

Step 2: Find Z-value [Use Excel NORMSINV( P-value)]

Step 3: Find X-value (µ and s known) from the equation: z=(X-µ)/s

Reference no: EM131918911

Questions Cloud

Define the key players in the article : Define the Key Players in the article, Explain the key issues ( stated or implied), Define the key facts.

Demonstrate ability to write clearly when expressing ideas : Demonstrate the ability to write clearly and cohesively when expressing one's ideas and/or intended purpose.

Hat will total homemade dividend be next year : hat will Al's total homemade dividend be next year?

Difference in the thickness of papers produced : The management of ABC Paper Corporation wants to determine whether there is a significant difference in the thickness of papers produced

By how many should this cheap-ticket airline overbook : The cost of free round-trip flight averages $180. By how many should this ‘Cheap-Ticket' airline overbook the flight (sale extra ticket)?

Adults work during their summer vacation : According to a Harris Interactive (July 2013) poll of U.S. adults, 61% of U.S. adults work during their summer vacation.

Explain the fda approach for liver safety for new drugs : Explain the FDA approach for liver safety for new drugs. Support discussion with 1 journal no older than 5 years.

Population average level of vitamin d : How do i obtain vitamin D blood levels on the entire US population of landscape gardeners. The population average level of vitamin D in US landscapers

What is the effective or annual cost of the trade credit : What is the effective, or equivalent, annual cost of the trade credit?

User Account

All Pages