Northern Airlines has a yield management model which determined that Northern could overbook Flight 1313 on June
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Northern Airlines has a yield management model which determined that Northern could overbook Flight 1313 on June 20 by 30 seats, which it did. Southern Airlines, which competes with Northern on this route, went bank- rupt without any preliminary warning on June 19. As a result, Northern had 24 more passengers show up for Flight 1313 than there were seats available.. Northern had to give 24 passengers $500 each in compensation to get them to take a later flight. What was the cost of prediction error?
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