An airline charges the following baggage fees: $25 for first bag and $35 for second. Assume 54% of passengers have no checked luggage, 34% have one piece of checked luggage and 12% have two pieces. We assume a negligible portion of people check more than two bags.
a) Build a probability model, compute the average revenue per passenger, and compute the corresponding standard deviation.
b) About how much revenue should the airline expect for a flight of 120 passengers? With what standard deviation? Note any assumptions you make and if you think they are justified.