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QUESTION
A Motel has 15 bedrooms. From past experience, the manager knows that on the average, 20% of the people who make room reservations don't show up.
- A Motel has 15 bedrooms. From past experience, the manager knows that on the average, 20% of the people who make room reservations don't show up. On a particular day, the manager accepts 20 reservations. If a customer with a reservation shows up and the motel has run out of rooms, it is the motel's policy to pay $100 as compensation to the customer.
- a) What is the probability distribution of the compensation that the motel must pay?
- b) What is the expected value and standard deviation of the compensation that the motel must pay?
