Statistics for Business & Economics, Revised (MindTap Course List)
12th Edition
ISBN: 9781285846323
Author: David R. Anderson, Dennis J. Sweeney, Thomas A. Williams, Jeffrey D. Camm, James J. Cochran
Publisher: South-Western College Pub
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Chapter 21.4, Problem 16E
To save on expenses, Rona and Jerry agreed to form a carpool for traveling to and from work. Rona preferred to use the somewhat longer but more consistent Queen City Avenue. Although Jerry preferred the quicker expressway, he agreed with Rona that they should take Queen City Avenue if the expressway had a traffic jam. The following payoff table provides the one-way time estimate in minutes for traveling to and from work.
| State of Nature | ||
| Expressway Open | Expressway Jammed | |
| Decision Alternative | s1 | s2 |
| Queen City Avenue, d1 | 30 | 30 |
| Expressway, d2 | 25 | 45 |
Based on their experience with traffic problems, Rona and Jerry agreed on a .15
In addition, they agreed that weather seemed to affect the traffic conditions on the expressway. Let
C = clear
O = overcast
R = rain
The following conditional probabilities apply.
| P(C | s1) 5= .8 | P(O | s1) = .2 | P(R | s1) = .0 |
| P(C | s2) = .1 | P(O | s2) = .3 | P(R | s2) = .6 |
- a. Use Bayes’ theorem for probability revision to compute the probability of each weather condition and the conditional probability of the expressway open, s1, or jammed, s2, given each weather condition.
- b. Show the decision tree for this problem.
- c. W hat is the optimal decision strategy, and what is the expected travel time?
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Chapter 21 Solutions
Statistics for Business & Economics, Revised (MindTap Course List)
Ch. 21.2 - Prob. 1ECh. 21.2 - A decision maker faced with four decision...Ch. 21.2 - Hudson Corporation is considering three options...Ch. 21.2 - Myrtle Air Express decided to offer direct service...Ch. 21.2 - The distance from Potsdam to larger markets and...Ch. 21.2 - Seneca Hill Winery recently purchased land for the...Ch. 21.2 - The Lake Placid Town Council has decided to build...Ch. 21.3 - Consider a variation of the PDC decision tree...Ch. 21.3 - A real estate investor has the opportunity to...Ch. 21.3 - Dante Development Corporation is considering...
Ch. 21.3 - Hales TV Productions is considering producing a...Ch. 21.3 - Martins Service Station is considering entering...Ch. 21.3 - Lawsons Department Store faces a buying decision...Ch. 21.4 - Suppose that you are given a decision situation...Ch. 21.4 - In the following profit payoff table for a...Ch. 21.4 - To save on expenses, Rona and Jerry agreed to form...Ch. 21.4 - The Gorman Manufacturing Company must decide...Ch. 21 - An investor wants to select one of seven mutual...Ch. 21 - Warren Lloyd is interested in leasing a new car...Ch. 21 - Hemmingway, Inc. is considering a 50 million...Ch. 21 - Embassy Publishing Company received a six-chapter...Ch. 21 - Lawsuit Defense Strategy John Campbell, an...
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