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An airline is reconsidering their overbooking policies on transatlantic flights. The planes they fly have 175 seats, which they sell out every time. While tickets are non refundable, they still have a fair number of no-shows, and often fly with empty seats. Each ticket sells for $800. However, if there are more passengers than seats, they must buy a ticket for each extra customer at a net cost of $400. a) Given the following distribution of number of passengers who don’t show up, how many extra tickets should the airline sell for each flight?

Operation Management, Management Studies

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