Question: ( c ) The airline considers a penalty function in deciding how many passengers to overbook. If more than 5 0 passengers show up ,
c The airline considers a penalty function in deciding how many passengers to overbook.
If more than passengers show up a penalty of $ per extra passenger is considered
loss of customer goodwill, bumping passengers to a different flight etc. If less than
passengers show up a penalty of $ per empty seat is considered opportunity cost
etc. What is the expected value of the penalty function? points
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