Many passengers to seat on the plane

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Reference no: EM132175980

1. Offwefly Airlines has a daily flight from Sacramento to Las Vegas with a capacity of 100 passengers. On average, 14 ticket holders cancel their reservations at the last minute, so the company intentionally overbooks the flight. Cancellations can be described by a normal distribution with a standard deviation of 4.7. Profit per passenger is $90. If a passenger arrives but cannot board due to overbooking, the company policy is to provide compensation of $176. What is the optimal probability of having one or more empty seats on the plane?

2. Offwefly Airlines has a daily flight from Sacramento to Las Vegas with a capacity of 100 passengers. On average, 18 ticket holders cancel their reservations at the last minute, so the company intentionally overbooks the flight. Cancellations can be described by a normal distribution with a standard deviation of 3.4. Profit per passenger is $195. If a passenger arrives but cannot board due to overbooking, the company policy is to provide compensation of $122.

What is the optimal probability of having too many passengers to seat on the plane?

Reference no: EM132175980

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