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A Delta flight from ATL to PUJ ( Punta Cana, Dominican Republic ) has a capacity of 1 0 0 passengers and fills up quickly

A Delta flight from ATL to PUJ (Punta Cana, Dominican Republic) has a capacity of 100 passengers and fills up quickly for the Thanksgiving holiday. Delta does not want any seats to be wasted on this flight due to no-shows. The ticket costs $750. In the past, no-shows have ranged uniformly from 10 to 20. If Delta cannot accommodate a passenger on this flight, the passenger will be sent to Miami on a Delta flight and then to San Juan, PR on an American Airlines flight. The passenger will spend the night at a San Juan airport hotel. The next morning, the passenger will be flown by American to Punta Cana. In addition to the denied boarding compensation (DBC) based on the US-DOT formula, Delta airline needs to pay American Airlines $800 for re-accommodation. The hotel and food vouchers cost $150. Compute the optimal overbooking limit.
(a) What is the DBC based on the US-DOT formula?
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(b) What is the total denial cost?
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(c) What is the optimal overbooking limit?
[ Select ]

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