Optimal probability of having one-more empty seats on plane

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Reference no: EM132306937

Offwefly Airlines has a daily flight from Sacramento to Las Vegas with a capacity of 100 passengers. On average, 16 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 2.3. Profit per passenger is $70. If a passenger arrives but cannot board due to overbooking, the company policy is to provide compensation of $152. What is the optimal probability of having one or more empty seats on the plane?

Reference no: EM132306937

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