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Hong Kong Budget ( HKB ) Airline is a small start - up airline that will be offering service to Okinawa using a 1 1
Hong Kong Budget HKB Airline is a small startup airline that will be offering service to Okinawa using a seat McDonnell Douglas MD airliner. They know that they have two groups of passengers: business passengers and leisure passengers. After some market analysis, HKB executives have decided to offer two ticket prices: a HKD price for customers who purchase their tickets days in advance X fare and a HKD price for all others Yfare Assume that customers for these two fare categories come from different pools and customers do not switch. From historical data, HKB managers know that the demand for Xfare is unlimited but Yfare follows a normal distribution with a mean of and a standard deviation of : HKB managers want to maximize their expected revenues on their flight. If so how many seats should they allocate to each fare category?
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