Question

7. 1.50 points Problem 11-5 Next week, Super Discount Airlines has a fight from New York to Los Angeles that will be booked to capacity. The airline knows from past history that an average of 40 customers with a standard deviation of 26) cancel their reservation or do not show for the flight Revenue from a ticket on the fight is $140. If the fight is overbooked, the airline has a policy of getting the customer on the next available flight and giving the person a tree round-trip ticket on a future flight. The cost of this free round-trip ticket averages $270. Super Discount consider the cost of flying the plane from New York to Los Angeles a sunk cost By how many seats should Super Discount overbook the fight? Use Excel's NORMSINVO function to find the correct critical value for the given a level. Do not found intermediate calculations. Round your answer to the nearest whole number) Overbooked by References Book & Resources Worksheet D uty commediate Problem 11-5 Learning Objectives 11-02 Anayze how dinerent inventory control systems

Answer 1

Sautiouz Cost of under booking > Cu = $140: Cost of cureboling Co = $270. Grietical gratis cu 140mm ito - 4404270 -0.34146. By using encel NORMSI NV Co.34146) we will get ..-0.40648 averbook by mean + (2* Standard Deviation? 54044-.40848) *26) - 110 -10.62048. - 29.37952 $89.4 . . . . • Overbook by 229 | Crearest whole Numbers