Compute the Posterior Probabilities by completing the table 3. (c-f). The Gorman Manufacturing Company must decide whether tomanufacture a component part at its Milan, Michigan, plant or purchase thecomponent part from a supplier. The resulting profit is dependent upon thedemand for the product.State of NatureLow DemandMedium DemandHigh DemandDecislon AlternativeManufacture, dPurchase, d-2010404510070The relevant condifional probabilities are as follows:P(F|) - 0.10P(F 52) - 0.40P(F|5) - 0.00P(U s) - 0.90P(U |5) = 0.00P(U|s3) - 0.40c. A lest market study of the potential dermand for the product is expected to reporteither a tavorable (F) or untavorable (U) condition.I. Compute the Posterlor Probabilitles by completing the table StatesofPriorConsultant'sJoint Probabilities,Probabilities,P (A)Posterior Probabilities,P(| F)Record,Nature,P(F and s)P(FI)SaStatesofPriorConsultant'sJoint Probabilities,Posterior Probablities,Probabilities,Record,Nature,P(U and s)P(a| U)P (s)P(U| s)S1Ss

Given: Conditional Probabilities: P(F,s1)=0.10, P(F,s2)=0.40 ,P(F,s3)=0.60 P(U,s1)=0.90,…

3. (c-f). The Gorman Manufacturing Company must decide whether to manufacture a component part at its Milan, Michigan, plant or purchase the component part from a supplier. The resulting profit is dependent upon the demand for the product. State of Nature Low Demand Medium Demand High Demand Decision Alternative Manufacture, di Purchase, da -20 10 40 45 100 70 The relevant condifional probabilities are as follows: P(F|51) = 0.10 P(F 52) = 040 P(F|53) = 0.00 P(U|53) = 0,40 P(U|s1) = 090 P(U 52) = 0.60 c. A test market study of the potential demand for the product is expected to report either a tavorable (F) or untavorable (U) condition. I. Compute the Posterlor Probablities by completing the table

3. (c-f). The Gorman Manufacturing Company must decide whether to manufacture a component part at its Milan, Michigan, plant or purchase the component part from a supplier. The resulting profit is dependent upon the demand for the product. State of Nature Low Demand Medium Demand High Demand Decision Alternative Manufacture, di Purchase, da -20 10 40 45 100 70 The relevant condifional probabilities are as follows: P(F|51) = 0.10 P(F 52) = 040 P(F|53) = 0.00 P(U|53) = 0,40 P(U|s1) = 090 P(U 52) = 0.60 c. A test market study of the potential demand for the product is expected to report either a tavorable (F) or untavorable (U) condition. I. Compute the Posterlor Probablities by completing the table

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Compute the Posterior Probabilities by completing the table

3. (c-f). The Gorman Manufacturing Company must decide whether to
manufacture a component part at its Milan, Michigan, plant or purchase the
component part from a supplier. The resulting profit is dependent upon the
demand for the product.
State of Nature
Low Demand
Medium Demand
High Demand
Decislon Alternative
Manufacture, d
Purchase, d
-20
10
40
45
100
70
The relevant condifional probabilities are as follows:
P(F|) - 0.10
P(F 52) - 0.40
P(F|5) - 0.00
P(U s) - 0.90
P(U |5) = 0.00
P(U|s3) - 0.40
c. A lest market study of the potential dermand for the product is expected to report
either a tavorable (F) or untavorable (U) condition.
I. Compute the Posterlor Probabilitles by completing the table

States
of
Prior
Consultant's
Joint Probabilities,
Probabilities,
P (A)
Posterior Probabilities,
P(| F)
Record,
Nature,
P(F and s)
P(FI)
Sa
States
of
Prior
Consultant's
Joint Probabilities,
Posterior Probablities,
Probabilities,
Record,
Nature,
P(U and s)
P(a| U)
P (s)
P(U| s)
S1
Ss

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