Problem 11-5 (Algo)

Next week, Super Discount Airlines has a flight from New York to Los Angeles that will be booked to capacity. The airline knows from history that an average of 38 customers (with a standard deviation of 25) cancel their reservation or do not show for the flight. Revenue from a ticket on the flight is $137. If the flight is overbooked, the airline has a policy of getting the customer on the next available flight and giving the person a free round-trip ticket on a future flight. The cost of this free round-trip ticket averages $265. Super Discount considers the cost of flying the plane from New York to Los Angeles a sunk cost. By how many seats should Super Discount overbook the flight? (Use Excel's NORM.S.INV() function to find the z value. Round z value to 2 decimal places. Round your answer to the nearest whole number.)

	Overbook by