Question

A new airline company has a commuter airplane that can hold up to 64 passengers. The plane flies a single route and charges passengers $300 for a one-way fare. All fares are 100% refundable if the passenger does not show up for the flight. The fixed cost (the cost that does not change with the number of passengers, such as crew salaries, airport fees, etc) for every flight is $1,000. The variable cost (the additional cost per passenger) for every flight is $150 per passenger. Create a spreadsheet that calculates the total profit per flight based on the number of passengers on the plane. What is the total profit if they fly with 56 passengers? Because they have a full refund policy, it is common for customers not to show up. Airline company management is wondering if it would make financial sense to overbook the flight and risk having not enough seats for all passengers that show up. In that case, the airline would find volunteers to give up their seats in exchange for a free ticket to the same destination on the next available flight. This would cost $100 for each overbooked passenger. Update your spreadsheet to account for overbooked passengers. What is the total profit if they fly with 64 passengers after having sold 72 tickets, assuming all 72 passengers show up? If 80 tickets are sold, the number of passengers expected to show up can be approximated by a normal distribution with a mean of 68 and standard deviation of 5. Therefore, if the airline sells 80 tickets for the flight, what is the probability that the number of passengers who show up will result in an overbooked flight? Enter your answer as a decimal probability (not a percent) rounded to 4 decimal places.

          A new airline company has a commuter airplane that can hold up
to 64 passengers. The plane flies a single route and charges
passengers $300 for a one-way fare. All fares are 100% refundable
if the passenger does not show up for the flight. The fixed cost
(the cost that does not change with the number of passengers, such
as crew salaries, airport fees, etc) for every flight is $1,000.
The variable cost (the additional cost per passenger) for every
flight is $150 per passenger.
Create a spreadsheet that calculates the total profit per flight
based on the number of passengers on the plane. What is the total
profit if they fly with 56 passengers?
Because they have a full refund policy, it is common for
customers not to show up. Airline company management is wondering
if it would make financial sense to overbook the flight and risk
having not enough seats for all passengers that show up. In that
case, the airline would find volunteers to give up their seats in
exchange for a free ticket to the same destination on the next
available flight. This would cost $100 for each overbooked
passenger.
Update your spreadsheet to account for overbooked passengers.
What is the total profit if they fly with 64 passengers after
having sold 72 tickets, assuming all 72 passengers show up?

If 80 tickets are sold, the number of passengers expected to
show up can be approximated by a normal distribution with a mean of
68 and standard deviation of 5. Therefore, if the airline sells 80
tickets for the flight, what is the probability that the number of
passengers who show up will result in an overbooked flight? Enter
your answer as a decimal probability (not a percent) rounded to 4
decimal places.

Added by Jessica T.

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