Question: Problem 11-5 Next week, Super Discount Airlines has a flight from New York to Los Angeles that will be booked to capacity. The airline knows

Problem 11-5 Next week, Super Discount Airlines

Problem 11-5 Next week, Super Discount Airlines has a flight from New York to Los Angeles that will be booked to capacity. The airline knows from past history that an average of 20 customers with a standard deviation of 10) cancel their reservation or do not show for the flight. Revenue from a ticket on the flight is $100. 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 $210. 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 NORMSINV() function to find the correct critical value for the given a-level. Do not round intermediate calculations. Round your answer to the nearest whole number.) Overbooked by passengers

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