A test market study of the potential demand for the product is expected to report either a favorable (F) or unfavorable (U) condition. The relevant conditional probabilities are as follows: What is the probability that the market research report will be favorable?
A test market study of the potential demand for the product is expected to report either a favorable (F) or unfavorable (U) condition. The relevant conditional probabilities are as follows: What is the probability that the market research report will be favorable?
Calculus For The Life Sciences
2nd Edition
ISBN:9780321964038
Author:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Publisher:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Chapter9: Multivariable Calculus
Section9.CR: Chapter 9 Review
Problem 54CR
Related questions
Question
The XY Manufacturing Company must decide whether to manufacture acomponent part at its plant or purchase the component part from a supplier. The resulting profit is dependent upon the demand for the product. The following payoff table shows the projected profit (in ten thousand of pesos):
State of Nature | State of Nature | State of Nature | |
Decision Alternative | Low Demand S_(1) |
Medium Demand S_(2) |
High Demand S_(3) |
Manufacture, d_(1) | -100 | 200 | 500 |
Purchase, d_(2) | 50 | 225 | 350 |
The state-of-nature probabilities are P(s1) = 0.35, P(s2) = 0.35, and P(s3
) = 0.30.
c. A test market study of the potential demand for the product is expected to report
either a favorable (F) or unfavorable (U) condition. The relevant conditional probabilities are as follows:
What is the probability that the market research report will be favorable?
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