The business analytics team at CancunAir has collected and analyzed some data for one of its busiest routes from LA to Cancun. The team has determined the probability of various numbers of no-show passengers on this route and documented these values as shown in the table below. The team has estimated that the cost incurred by CancunAir for each unoccupied seat on any flight along this route is $69 USD. The team has also estimated that the cost associated with having to turn away a customer who was overbooked is $119 USD. Use this scenario to answer the next question. Question: The values located in the bottom row (labeled MMM) of the associated table represent the expected:
Route selected : Probability associated with No-Shows Number of reservations overbooked No-Shows
Mexico City to Cancun Zero One Two Three
0 0.4 0 50 100 150
1 0.3 69 0 50 100
2 0.2 138 69 0 50
3 0.1 207 138 69 0
MMM 69 47.60 61.90 100
a. profit
b. loss
c. revenue
d. cash flow
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