How many seats should super discount overbook the flight

Assignment Help Operation Management

Reference no: EM132266026

Next week, Super Discount Airlines has a flight from New York to Los Angeles that will be booked to capacity. The airline knows from past history that an average of 25 customers (with a standard deviation of 13) cancel their reservation or do not show for the flight. Revenue from a ticket on the flight is $135. If the flight is overbooked, the airline has a policy of getting the customer on the next available flight and giving the person a free round-trip ticket on a future flight. The cost of this free round-trip ticket averages $218. Super Discount considers the cost of flying the plane from New York to Los Angeles a sunk cost.

By how many seats should Super Discount overbook the flight? (Use Excel's NORMSINV() function to find the correct critical value for the given α-level. Do not round intermediate calculations. Round your answer to the nearest whole number.)

Overbooked by passengers

Reference no: EM132266026

Questions Cloud

Tuscany leather products : A medium size specialty leather goods designer and manufacturer, Tuscany Leather Products (TLP) has had success exporting their own line of gloves, handbags,

Primary characteristic of inside directors of corporations : Identify a primary characteristic of the inside directors of corporations. Identify a feature of the soft square.

Negative elements of organizational communication : Were there negative elements of organizational communication that you didn't know existed?

About the service probability : Find the reorder point necessary to provide a 99 percent service probability. what will the new service probability be?

How many seats should super discount overbook the flight : Super Discount Airlines has flight from New York to Los Angeles that will be booked to capacity. By how many seats should Super Discount overbook the flight?

Identify feature of changing phase of organizational change : Avoiding the enforcement of a standard-form contract is not possible.? Identify a feature of the changing phase of organizational change.

How would you assess nussbaum incentive program : How would you assess Nussbaum’s incentive program? Which basic motivation concepts and theories are illustrated in this case?

Business managers be aware of sociocultural elements : Why should international business managers be aware of sociocultural elements when making their everyday decisions?

Managing project budgets while explaining : Discuss processes involved in determining and managing project budgets while explaining what points and pitfalls project managers should keep in mind

User Account

All Pages