A flight operated by Kanata Airline from Montreal to Toronto is scheduled to depart at 8:30am on May 6. The aircraft has a capacity of 97 seats. The full-fare tickets are priced at $300 at Kanata's official website with secured reservation system and flexible seat choice option. At the same time, discount tickets for this flight are also listed at cheaptickets.com for $200.

a) (4pt) On Apr 6, there are still 50 unsold seats on the flight. The airline estimates that the future demand of full-fare customers is uniformly distributed between 20 and 69.

- In maximizing the expected revenue, should the Kanata Airline remove its discount ticket listing from cheaptickets.com? Usedecision treeto justify your answers.

- Overall, when should Kanata exclusively sell via its official website (at $300)?

b) (3pt) Suppose that Kanata removed its cheaptickt.com listing on Apr 6, after which time it sold another 52 full-fare tickets. Obviously the current total booking exceeds the capacity of the flight. However, historical data suggests that some customers will cancel their reservations eventually, and the cancellation can be any number from 1 to 5 with equal probability. On the other hand, if a passenger shows up at the gate but cannot be assigned a seat, the airline will incur an inconvenient cost $500 in accommodating the passenger to a later flight. Should Kanata keep booking more full-fare customers? Usedecision treeto justify your answers.