Calgary Airlines routinely overbooks its flight from Calgary to Vancouver. Overbooking discounted seats can be expensive because

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Calgary Airlines routinely overbooks its flight from Calgary to Vancouver. 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 Calgary to Vancouver. The average ticket price is $300.
a. Given the frequency of no-shows in the following table, how many seats should be overbooked?
b. Calgary Air lines offers special rates on its Calgary/Vancouver 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

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Operations Management Creating Value Along the Supply Chain

ISBN: 978-1118301173

1st Canadian Edition

Authors: Roberta S. Russell, Bernard W. Taylor, Ignacio Castillo, Navneet Vidyarthi

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