QUESTION 18 (This problem description is for Questions 17-21) An airline is taking reservations for a direct flight from New York to Chicago. The aircraft used for this flight has 150 seats in total. The company is practicing a flat pricing policy for this route with the price of $300/ticket. Suppose the operating cost is zero dollars per seat. The airline customers have been known to cancel their bookings near a flight date. To address this problem of cancellation, the airline implements an over- booking method. A passenger is bumped if he/she already booked and paid for a ticket but can't get a seat on the airplane because the actual number of passengers showing up is larger than the seat capacity of the airplane. In this case, the airline has to use a backup plan that costs the company $500 per a bumped passenger. Suppose the airline implements a booking policy under which a customer does not pay/deposit any amount of money when booking (so there is no penalty for cancellation). From the past data, the airline estimates that that the number of cancellations follows a normal distribution with a mean of 40 seats and a standard deviation of 30 seats. Find the optimal number of overbookings that maximizes the expected revenue from this flight for the company. 48 56 . 52 50 O 60 O 58 o 54