Question

Suppose that a popular hotel has a total of 325 identical rooms. This hotel has adopted an overbooking policy in an effort to maximize usage of its available lodging capacity. Assume that each potential hotel customer holding a room reservation, independently of the other customers, cancels the reservation or simply does not show up at the hotel on a given night with a probability of 0.15

. (a) If the hotel reserves 360 rooms, what is the probability that at most 310 rooms will be used?

(b) If the hotel reserves 375 rooms, what is the probability that someone will show up and a room will not be available?

Answer 1