Question

A popular resort hotel has 300 rooms and is usually fully booked about 7% of the time a reservation is cancelled before the 6:00 pm deadline with no penalty. What is the probability that at least 285 rooms will be occipied? Use the binomial distribution to find the exact value and the normal approximation to the binomial and compare your answers.

Answer 1

Binomial distribution = 0.1026

Normal approximation = 0.1066

Explanation:

Given that :

p = 100% - 7% = 0.93

n = 300

1 - p = 0.07

Probability of atleast 285 rooms getting booked :

P(x = x) = nCx * p^x * (1-p)^(n-x)

To obtain P(x ≥ 285) ; we use a binomial probability calculator to save time :

P(x ≥ 285) = 0.1026

Using Normal approximation :

Mean (m) = np = 300 * 0.93 = 279

Standard deviation (s) = sqrt(np(1-p) = sqrt(285*0.07) = 4.419 = 4.42

Using :

Z = (x - m) / s

P(x ≥ 285) ; for normal approximation :P(x ≥ x) x = 285 - 0. 5 = 284.5

Z = (284.5 - 279) / 4.42

= 1.2443

P(Z ≥ 1.2443) = 0.1066 (Z probability calculator)