How many seats should the airline sell

Assignment Help Mathematics

Reference no: EM13188896

Suppose a small plane can seat 20 passengers. Airlines often book more passengers than seats available knowing there is a good chance someone might cancel and the airline loses $250 for every empty seat. On the other hand, when they are overbooked and more people show up than there are seats available for them, they have to offer an incentive for passengers to reschedule and the incentive to get a passenger to give up a seat costs the airline $100 on average. How many seats should the airline sell in order to minimize their expected losses?

(Note: this is a question covering some of the material from Conditional Probability & Independence and/or Random Variables (from "A First Course in Probability" by Ross) so it may be tricky. Please explain in details, will reward THANKS)

Reference no: EM13188896

Questions Cloud

What percent of the wood is removed in planning and drying : A standard two by four actually measures 1 ½ in by 3 ½ in. The rough board is 2 inches by 4 inches, but is planed and dried to the finished to the finished size. What percent of the wood is removed in planning and drying?

Explain the theory that education acts as a signaling device : Explain the difference between inferior goods and normal goods. As a developing economy experiences increases in income (measured by GDP), what do you predict will happen to the demand for inferior goods. Explain the theory that education acts as a..

According to freudian theory : According to Freudian theory, anxiety is a signal for the ego to marshal its defense mechanisms, which function as

Find the greatest common factor for the group of terms : Find the greatest common factor for the group of terms: -30a3, 5a5. Find the greatest common factor for these terms and explain how you arrived at your answer.

How many seats should the airline sell : How many seats should the airline sell in order to minimize their expected losses?

Equipment and allocation of resources : Which details a security response plan for a school, paper should include financial considerations, equipment, and allocation of resources.

Evaluate his negative assessment of the situation : "We have too many hotels in this town already. Statistics show that vacancy rates average 20 percent on any given night." Assuming this is correct, evaluate his negative assessment of the situation in terms of business-stealing and product-variet..

Find the width of the box that can be produced : s to manufacture a box with a volume of 24 cubic feet that is open on top and is twice as long as it is wide. Find the width of the box that can be produced using the minimum amount of material. Round to the nearest tenth, if necessary.

Description of how virtual applications will be delivered : Description of how virtual applications or desktops (or both) will be delivered to the user's desktops and a description of how you will provide disaster recovery in this infrastructure

User Account

All Pages