Assignment #1
Quantitative Methods
July 28, 2012
#1
Overbooking Flights Air America has a policy of booking as many as 160 persons on an airplane that can seat only 145 (past studies have revealed that only 85% of the booked passengers actually arrive for the flight). Find the probability that if Air America books 160 persons, not enough seats will be available. Is this probability low enough so that overbooking is not real concern for passengers?
For calculations, we are going to use binominal distribution formula and computer.
N=160
P= 0.85
P(X) = n!/x!(n-x)! * p! (1-p)n-x
P(x≤145) = P (x=0) + P (x=1) + P (x=2) + … + P (x=145) = 0.989
P (x>145) = 0.013 = 1-0.989=0.011
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Answer: Probability that if Air America books 160 persons, not enough seats will be available is 1%, which is very low. Yes, this probability is low enough so that overbooking is not real concern for passengers
#2 …show more content…
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