Atlanta Airlines routinely overbooks its flight from Atlanta to Boston. Overbooking discounted seats can be expensive because providing a bumped passenger with a last-minute flight on a competing carrier can cost $450. A 120-passenger jet costs about $6000 to operate from Atlanta to Boston. The average ticket price is $300.
a. Given the frequency of no-shows in the following table, how many seats should be overbooked?
b. Atlanta Air offers special rates on its Atlanta/Boston route for the holidays. How would a $200 ticket price affect the number of seats overbooked?
No-Shows Frequency
1 .........15
2 .........10
3 .........10
4 ..........5
5 ..........3
6 ..........5