What is the optimal booking limit


Question: Granite State Airlines serves the route between JFK and DCA, with a single-flight-daily 100-seat aircraft. The one-way fare for discount tickets is $100, and the one-way fare for full-fare tickets is $150. The airline estimates that full-fare demand is normally distributed with a mean of 56 passengers and a standard deviation of 23 while discount fare demand is normally distributed with a mean of 88 passengers and a standard deviation of 44. If the discount fare is not available, 20% of the discount fare demand would buy-up to the full fare. What is the optimal booking limit?

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