An Airline Experiences a No-Show Rate of 6

question 87

Multiple Choice

An airline experiences a no-show 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%?

• A)167
• B)165
• C)166
• D)164

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Definitions:

Fixed Manufacturing Overhead

The consistent expenses tied to manufacturing that do not vary with the level of production, such as salaries of managerial staff and depreciation of equipment.

Direct Labor

Direct labor refers to the work contributed by employees who are directly involved in the manufacturing or production process of goods or services.

Financial Advantage

Refers to the benefit gained in financial terms, often understood as the competitive edge a company or individual has that allows for greater profit or more favorable economic outcomes.

Variable Costs

Costs that change in proportion to the level of production or sales activity, such as direct materials or sales commissions.