An airline regularly overbooks its flights because it knows that the probability

Question

An airline regularly overbooks its flights because it knows that the probability an individual will not show up is 0.05 (assume passengers are independent). The plane for particular flight can hold 80 people, but the airline sells 81 tickets for this flight. a. What is the probability there will not be enough seats for those passengers who show up to fly? b. Is the assumption that passengers arc independent reasonable? To cam any marks, you must justify your answer. c. Each passenger paid $300 for their ticket. If someone doesn't show up for the light, they are refunded $200. What is the airline's expected incomes for this flight? d. Using the information in part c), what is the expected cost for a passenger?

Explanation / Answer

total seat= 80

total passengers= 80

Probability enough seat will not be there = (81-80)/81= 0.0123457

c)

for this flight

income/person = (1-0.0123457)*300 -0.0123457*200 = $293.827

total incom= no of persons*( income/person) = 81*293.827 =$23800

d)

cost per person =( income /person ) for flight= $293.827

thanks !

b)

yes! its resonable because probability for each persons is independent to each other and equal.

c)

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.