Continue to consider the Unplugged Airlines problem described above. Next, assume the available capacity is still 200 seats but Unplugged no longer allows overbooking due to bad press. It instead sets two fare classes: the high fare at $675.00, and the low fare at $375.00. Demand for the low fare is abundant while demand for the high fare is normally distributed with a mean of 80 and a standard deviation of 35.

What is your optimal protection interval (i.e., how many seats should you "protect for high fare customers)?

28 (approx.)

93 (approx.)

76 (approx.)

80 (approx.)

None of the provided answers

What is your optimal protection interval (i.e., how many seats should you "protect for high fare customers)? Suppose you set the protection interval at zero and that the low fare customers book well before the high fare customers. What is the expected revenue from the flight leg under consideration?

$25,500

$37,500

$75,000

$97,800

Can be computed, but requires rather complex (unknown to us) methodology