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MindTap Business Statistics for Ragsdale's Spreadsheet Modeling & Decision Analysis, 8th Edition, [Instant Access], 2 terms (12 months)
8th Edition
ISBN: 9781337274876
Author: Cliff Ragsdale
Publisher: Cengage Learning US
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Huntz Food Products is attempting to decide if it shouldintroduce a new line of salad dressings called SpecialChoices. The company can test market the salad dressingsin selected geographic areas or bypass the test market and
introduce the product nationally. The cost of the test mar-ket is $150,000. If the company conducts the test market, it
must wait to see the results before deciding whether or notto introduce the salad dressings nationally. The probability
of a positive test market result is estimated to be 0.6. Alter-natively, the company cannot conduct the test market and
make the decision to introduce the dressings or not. If thesalad dressings are introduced nationally and are a success,the company estimates it will realize an annual profit of$1,600,000 while if the dressings fail it will incur a loss of$700,000. The company believes the probability of successfor the salad dressings is 0.50 if it is introduced without thetest market. If the company does conduct the test market…
A national survey indicated that 30% of adults conduct their banking online. It also found that 40% are under the age of 50, and that 25% are under the age of 50 and conduct their banking online.
A. What percentage of adults do not conduct their banking online?
B. What type of probability is the 25% mentioned above? Just write down the name of the probability.
C. Construct a joint probability table showing all joint and marginal probabilities.
Alternative
A1
A2
Prior Probability
State of Nature
S1
S2
-40
100
0.4
75
0
0.6
There is an option of paying $100 to have research done to better predict which state of nature will occur. When
the true state of nature is S1, the research will accurately predict S1 60% of the time. When the true state of nature
is S2, the research will accurately predict S2 80% of the time.
What is the posterior probability of S2 given that the research predicts S2?
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