Offwefly airlines has a daily flight from sacramento to las, Ask an Expert

Management Studies

Offwefly Airlines has a daily flight from Sacramento to Las Vegas with a capacity of 100 passengers. On average, 17 ticket holders cancel their reservations at the last minute, so the company intentionally overbooks the flight. Cancellations can be described by a normal distribution with a standard deviation of 4.6. Profit per passenger is $190. If a passenger arrives but cannot board due to overbooking, the company policy is to provide compensation of $150.

What is the optimal probability of having too many passengers to seat on the plane?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M93103830

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