Question

A common practice of airline companies is to sell more tickets for a particular flight than there are seats on the plane, because customers who buy tickets do not
always show up for the fight. Suppose that the percentage of no-shoWs at flight time is 4%. For a particular fight with 144 seats, a total of 150 tickets were sold What
is probablity that the airline overbooked this fight?

Select one:
a. 0.5488
b. 0.889
c. 0.4424
d. 0.3588
e. 0.0125

Answer 1

Total tickets sold = 150

Let's call it a success when a passenger shows up

X: Number of passengers that showed up in 150,

Probability of success, p = 0.96

So accordingly X follows a binomial distribution

X~ Binomial (150, 0.96)

airline overbooked this fight means that number of passengers showed up is more than the seats available, which is 144

So, probability that the airline overbooked this fight = P(X>144)

We can use Excel function to find this probability

P(X>144) = =1- BINOM.DIST(144,150,0.96,1) = 0.4424

So, Option C is the right answer