Question: Given the following information, determine the optimal overbooking policy. The restaurants capacity is 24 tables. The historic number of no-shows for a typical day along

Given the following information, determine the optimal overbooking policy. The restaurant€™s capacity is 24 tables. The historic number of no-shows for a typical day along with the probability of occurrence is shown in the table below. The average profitability per table is $125 and the cost of lost good-will per table due to overbooking is approximately $250.

Reservations/Showing Up No-Shows Probability 8 9. 10 0.50 10 0.30 0.20 6 2.

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