Question

Air-USA has a policy of booking as many as 23 persons on an airplane that can seat only 21. (Past studies have revealed that only 85% of the booked passengers actually arrive for the flight.)

Find the probability that if Air-USA books 23 persons, not enough seats will be available.
prob = ____________

Is this probability low enough so that overbooking is not a real concern for passengers if you define unusual as 5% or less?

A. yes, it is low enough not to be a concern

B. no, it is not low enough to not be a concern

What about defining unusual as 10% or less?

A. yes, it is low enough not to be a concern

B. no, it is not low enough to not be a concern

Answer 1

Number of people who shows up out of 23 people could be modelled here as:

Now the required probability that  not enough seats will be available will be computed as:

Therefore 0.1204 is the required probability value.

Now as the probability here is greater than 0.10 , therefore the probability is not low enough here.

B. no, it is not low enough to not be a concern should be the answer for both the cases.