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13 answer is wrong. The correct answer is 91.61%. 2 passengers were overbooked. Hence, if 2 passengers (or fewer) do not show up for the
13 answer is wrong. The correct answer is 91.61%. 2 passengers were overbooked. Hence, if 2 passengers (or fewer) do not show up for the flight, the flight will be full and there will be no empty seats. If 3 passengers do not show up, we will have 1 empty seat. If 5 passengers do not show up, we will have (5 - 2 = 3) empty seats. If more than 5 passengers do not show up, we will have more than 3 empty seats. Therefore, "three or fewer empty seats" is equivalent to "5 or fewer no-shows". Thus, Probability (three or fewer empty seats) = Probability (No Shows <= 5) = F(5) , where (recall) the distribution of no-shows is Poisson with a mean of 3. Enter = 3 and Q = 5 in the "Analytics for a given Q" table for the Poisson demand model in the Newsvendor calculator. We see that F(5) = In-stock probability when Q = 5 = 91.61%
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