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How many seats should delta overbook for this route

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Reference no: EM133139457

Question - Delta Airlines flight 302, from New York JFK to Los Angeles LAX, is typically a full flight. Given the current policy for no change fees, on average 15 customers (with a standard deviation of 9) either cancel last minute or do not show up for this flight. The average revenue collected for this route is $235 per seat (lost profit if a seat goes unused).  If the flight is overbooked, Delta will need to re-ticket a volunteer passenger and offer them compensation in the form of a $400 Delta voucher (cost of overbooking). To maximize profits, how many seats should Delta overbook for this route?

Reference no: EM133139457

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