Question
During the recent economic slump, SunShine Airline discovered that airplanes on its Berlin - Dalaman route have been flying with more empty seats than usual.
During the recent economic slump, SunShine Airline discovered that airplanes on its BerlinDalaman route have been flying with more empty seats than usual. To stimulate demand, it has decided to offer a special, nonrefundable, day advancepurchase "Sunny Fare" for only oneway based on a roundtrip ticket. The "Regular Fare" ticket costs oneway. The Airbus used by SunShine Airline, has a total capacity seats for fare classes "Sunny Fare" and "Regular Fare" other seats of Airbus are allocated to the "Business Fare" class and management wants to limit the number of seats that are sold at "Sunny Fare" in order to sell "Regular Fare" tickets to passengers who have not made advance travel plans. Considering recent experience, the demand for "Regular Fare" tickets appears to have a normal distribution, with a mean of and a standard deviation of What is the revenue maximizing number of seats that SunShine Airline should reserve for the "Regular Fare" fare class if we assume that all seats reserved for the "Sunny Fare" fare class would be sold?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started