A commuter airline deliberately overbooks fights, figuring that only 75% of passengers with reservations show up for
Question:
(a) In order to use a binomial model in this problem, what assumptions are necessary? Are these reasonable?
(b) If the airline allows 25 passengers to book reservations for a fight, what is the probability that the fight will be oversold? Do not use the probability distribution and instead think about the mean and shape of the binomial distribution.
(c) Find the probability of overbooking. Did the rough approach taken in part (b) get close enough to the right answer?
Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
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Related Book For
Statistics For Business Decision Making And Analysis
ISBN: 9780321890269
2nd Edition
Authors: Robert Stine, Dean Foster
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