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Though overbooking has some potentially severe consequences (e.g., the United Airlines passenger dragging incident), the practice is still common in the airline industry. The mean number of passengers missing a particular flight is 10 with a standard deviation of 5. Typically, the flight is fully booked with all 200 seats purchased. The average price of a ticket is $1000. However, due to cheap hotels and restaurants in the airport's region, the cost of having to rebook a passenger when overbooking happens is unusually low at only $600. How many total seats should the airline book for this flight? [Hint: remember to give the total number of seats booked including the original 200 seats.]

Operation Management, Management Studies

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