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Management Studies

JetRed Airways flies several daily flights from Philadelphia to Chicago. Based on historical data, the flight on Wednesday evening before Thanksgiving is always sold-out. However, there are usually no-shows so the airline decides to improve revenues by overbooking. The no-shows are Poisson-distributed with mean 8 and the airline estimates that the cost of bumping a passenger is about 10 times more than ticket price. Suppose 6 seats are overbooked. How many seats can JetRed expect to have empty, on average (find they expect loss sales)?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M91390227

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