Maximum number of excess passenger reservations

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Reference no: EM131702890

Due to increased tourism in Los Angeles, California in the last 10 years, daily flights from San Diego Airport to Los Angeles Airport have an abundant demand. United Airlines has two fare classes (H) High of $300 and a (L) Low fare class of $250. United Airlines also overbooks customers to alleviate the costs of no shows. United estimates that turning customers away due to overbooking will cost them $350 per customer. Furthermore, they estimate that the distribution of no shows to be Poisson distributed with mean of 3.

Each United flight has 12 seats.

What is the maximum number of excess passenger reservations the plane should accept?

a. 2

b. 3

c. 4

d. Cannot be determined with the information provided.

Reference no: EM131702890

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