Question: Problem 2 0 - 5 ( Algo ) Next week, Super Discount Airlines has a flight from New York to Los Angeles that will be

Problem 20-5(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 past history that an average of 20 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 $150. 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 $200. 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.)
 Problem 20-5(Algo) Next week, Super Discount Airlines has a flight from

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