Use the following information to determine the optimal overbooking policy for a spa center at downtown Marquette. The center's capacity is 12 guests. The historic number of no-shows for a typical day, along with the probability of occurrence, is shown in the following table. The average profitability per guest is $80, and the cost of lost goodwill per guest due to overbooking is approximately $40.

No-Shows	Probability
0	0.35
1	0.35
2	0.30

Calculate the total expected profit with 12 reservations (and no overbooking).

$884

$922

$918

$960

Calculate the total expected profit with 13 reservations (which means 1 overbooking).

$884

$922

$918

$960

Calculate the total expected profit with 14 reservations (which means 2 overbookings).

$884

$922

$918

$960