Create an Excel spreadsheet using @Risk that allows you to solve the following problem and answer the questions listed below:

A ticket from New York to San Juan on Plop Airlines sells for $190. The plane can hold 110 people. It costs $9,000 to fly an empty plane. The airline incurs variable costs of $35 (food and fuel) for each person on the plane. If the flight is overbooked, anyone who cannot get a seat receives $200 in compensation. On average, 95% of all people who have a reservation show up for the flight.

a) To maximize expected profit, how many reservations for the flight should be taken by Plop? (70 points) b) If the airline has a policy that 50% of the tickets are sold at $160 and the other 50% at $220, explain how to solve the problem. (30 points)

Hint: The @Risk function RISKBINOMIAL can be used to simulate the number of passengers who show up. If the number of reservations taken is in cell A2, then the formula _RISKBINOMIAL(A2,.95) will generate the number of customers who actually show up for a flight.