**Unformatted text preview: **estimates that the demand of full fare customers is between 31 and 80, all numbers equally likely. a. To maximize the expected revenue, should the airline sell one more discount ticket? b. How many seats should we reserve for the full fare class? 4. (25 pts) A flight from LA to San Jose has 200 seats. The airline knows that the number of cancellation will vary between 1 and 4, all numbers equally likely. The fare price is $200 and the estimated denied boarding cost is $500. How many seats should the airline sell for this flight in order to maximize the expected revenue?...

View
Full Document

- Summer '07
- Vaitsos
- Management, Revenue, Pricing, pts