Question: An airline is interested in issuing tickets for a flight that contains 250 seats.  From past experience, the no-show rate is assumed to be 5%.  In other words, the assumption is that each ticketed passenger, independently of the others, shows up with a probability of 0.95 and cancels with a probability of 0.05.

For part a – c, consider the scenario that the airline issued exactly 250 tickets for the flight.

1. What is the probability that none of the tickets sold is a non-show? 5%
2. What is the probability that there are at least 10 cancellations?0.004%
3. Calculate the mean and the standard deviation of the number of cancellations. 0.0 27 and 0.03253
4. The airline is interested in finding out how sensitive various probabilities are to the number of tickets issued. To aid this process, the airline is interested in completing the table below with the probabilities that (1) at least 240 seats will be filled, (2) at least 245 seats will be filled, and (3) more than 250 passengers will show up. Some of the probabilities are filled in. Fill the rest of the table.

   Number of tickets issued	At least 240 seats filled	At least 245 seats filled	More than 250 show up
   245	0.015	0.000	0.000
   250		0.013	0.000
   255			0.004
   256
   257
   258
   259
   260

5. If the airline sells 258 tickets, what is the probability that someone will be bumped from the flight (that is more than 250 will show up)?
6. If the airline sells 260 tickets, what is the probability that at least 245 people show up, but no one will have to be bumped from the flight?
7. How many tickets should the airline sell for this flight if they would like to have at least a 90% probability of at least 240 people being on the flight?
8. If the airline decides that they would like passengers on this flight to be bumped less than 10% of the time, what is the maximum number of tickets they should sell?

Price: $2.99

Solution: The downloadable solution consists of 3 pages
Deliverable: Word Document