Statistic
posted by Anonymous on .
An airline experiences a noshow rate of 6%. What is the maximum number of reservations that it could accept for a flight with a capacity of 160, if it wants the probability of accommodating all reservation holders to be at least 95%.

Use the normal approximation to the binomial distribution.
mean = np
standard deviation = √npq
Therefore:
mean = .94n
standard deviation = √(n)(.94)(.06) = √(.0564n)
Using zscores:
z = (x  mean)/sd
With the data:
1.645 = (160  .94n)/√(.0564n)
Solve for n.
(Hint: Round answer to 165.)