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Because many passengers who make reservations do not show up, airlines often overbook flights

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Because many passengers who make reservations do not show up, airlines often overbook flights (sell more tickets than there are seats). A certain airplane holds 290 passengers. If the airline believes the rate of passenger no-shows is 5% and sells 305 tickets, is it likely they will not have enough seats and someone will get bumped?

Use the normal model to approximate the binomial to determine the probability of at least 291 passengers showing up.

Should the airline change the number of tickets they sell for this flight? Explain.

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tutor Added an answer on Jul 13,2019

Calculate the mean and the standard deviation using the formulas;- n *p and sqrt(n*p*q)

The probability of interest is that who show up,

p = 0.95

mean = 0.95 * 305 = 289.75

standard deviation = =SQRT(0.95 * 0.05*305)

probability of at least 291 passengers showing up = 1- =NORM.DIST(291,B2,B3,TRUE) , apply the standard normal distribution functions in excel to solve the problem.

The probability is very high, so it is likely that they should sell less .
However, the decision also depends on the relative costs of not selling seats and bumping passengers.

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Because many passengers who make reservations do not show up, airlines often overbook flights

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