Ant Co. has developed a new product, the A-Warren. It is now time to bring the A- Warren product to market. There are two alternatives for Ant-Co either market the product only in the local area, or market the product nationally. If Ant Co. rolls out the A-Warren product locally and it is successful, then the company will receive $1.4M from product sales. However, if the local rollout is unsuccessful, then the company will lose $100,000 ($0.1M) due to the costs of advertising. If Ant Co. rolls out the A-Warren product nationally and it is successful, then the company will receive $3M from product sales. However, if the national rollout is unsuccessful, then the company will lose $1M due to the costs of advertising. Historically, 40% of Ant Co.'s product rollouts have been successful. Ant Co. could choose to use a focus group to provide feedback on the A-Warren. In the past when Ant Co.'s products were successful (locally or nationally), the focus group predicted this 80% of the time. For products that were not successful, the focus group predicted the product would not be successful 90% of the time. What is the probability that the A-Warren product will be a success when the focus group predicts that it will be unsuccessful?

MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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A. None of the answers are correct.

B. 0.129

C. 0.080

D. 0.200

E. 0.158

Ant Co. has developed a new product, the A-Warren. It is now time to bring the A-
Warren product to market. There are two alternatives for Ant-Co either market the
product only in the local area, or market the product nationally.
If Ant Co. rolls out the A-Warren product locally and it is successful, then the company
will receive $1.4M from product sales. However, if the local rollout is unsuccessful,
then the company will lose $100,000 ($0.1M) due to the costs of advertising.
If Ant Co. rolls out the A-Warren product nationally and it is successful, then the
company will receive $3M from product sales. However, if the national rollout is
unsuccessful, then the company will lose $1M due to the costs of advertising.
Historically, 40% of Ant Co.'s product rollouts have been successful.
Ant Co. could choose to use a focus group to provide feedback on the A-Warren. In
the past when Ant Co.'s products were successful (locally or nationally), the focus
group predicted this 80% of the time. For products that were not successful, the
focus group predicted the product would not be successful 90% of the time.
What is the probability that the A-Warren product will be a success when the focus
group predicts that it will be unsuccessful?
Transcribed Image Text:Ant Co. has developed a new product, the A-Warren. It is now time to bring the A- Warren product to market. There are two alternatives for Ant-Co either market the product only in the local area, or market the product nationally. If Ant Co. rolls out the A-Warren product locally and it is successful, then the company will receive $1.4M from product sales. However, if the local rollout is unsuccessful, then the company will lose $100,000 ($0.1M) due to the costs of advertising. If Ant Co. rolls out the A-Warren product nationally and it is successful, then the company will receive $3M from product sales. However, if the national rollout is unsuccessful, then the company will lose $1M due to the costs of advertising. Historically, 40% of Ant Co.'s product rollouts have been successful. Ant Co. could choose to use a focus group to provide feedback on the A-Warren. In the past when Ant Co.'s products were successful (locally or nationally), the focus group predicted this 80% of the time. For products that were not successful, the focus group predicted the product would not be successful 90% of the time. What is the probability that the A-Warren product will be a success when the focus group predicts that it will be unsuccessful?
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