Because there is a significant number of no-shows on a specific daily flight, the airline wants to

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Because there is a significant number of no-shows on a specific daily flight, the airline wants to intentionally overbook the flight. The number of no-shows can be described by a Normal distribution with a mean of 18 passengers and a standard deviation of 4.55 passengers. Profit per passenger is $99. If a passenger arrives but cannot board due to overbooking, the company policy is to provide a $200 coupon for any future flight on the airline. How many tickets should be overbooked to maximize expected profit?

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Operations Management

ISBN: 9781259270154

6th Canadian Edition

Authors: William J Stevenson, Mehran Hojati, James Cao

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