Question: A ticket from Indianapolis to Orlando on Deleast Airlines sells

A ticket from Indianapolis to Orlando on Deleast Airlines sells for $150. The plane can hold 100 people. It costs Deleast $8000 to fly an empty plane. Each person on the plane incurs variable costs of $30 (for food and fuel). If the flight is overbooked, anyone who cannot get a seat receives $300 in compensation. On average, 95% of all people who have a reservation show up for the flight. To maximize expected profit, how many reservations for the flight should Deleast book?


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  • CreatedApril 01, 2015
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