Granite State Airlines also serves the route between Washington, DC (National), and Portsmouth, NH, with a single flight daily. The airline sells both discount-fare and full-fare tickets. The airline has assigned a 100-seat aircraft to the flight. Using Littlewood’s rule, the airline has determined that the optimal booking limit for a flight departing in two weeks is 40. a. What is the protection level for the flight? b. The full fare for this flight is $200 and the discount fare is $100. What is the expected full-fare demand for this flight, assuming that the full-fare demand follows a normal distribution?
• Hint: this question is a little bit tricky, but the given information is sufficient enough to determine the expected full-fare demand. c. The flight controller has learned that the annual Yorkshire Terrier Fancier’s Convention will be held in Portsmouth in two weeks. As a result, he increased the forecast of mean discount-fare demand by 50% over its previous value. The full-fare forecast remained the same. What are the new booking limits and protection levels for this flight? d. Right after learning about the Yorkshire Terrier Fancier’s Convention, the flight controller learned that, due to maintenance problems, there will also be a switch capacity. Instead of a 100-seat aircraft, the flight will be served by a 120-seat aircraft. What are the new booking limits and protection levels for this flight?