Solutions Chapter 7A

# Solutions Chapter 7A - Solutions 7.1 We often have to make...

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85 Solutions 7.1. We often have to make decisions in the face of uncertainty. Probability is a formal way to cope with and model that uncertainty. 7.2. An uncertain quantity or random variable is an event that is uncertain and has a quantitative outcome (time, age, \$, temperature, weight, . . . ). Often a non-quantitative event can be the basis for defining an uncertain quantity; specific non-quantitative outcomes (colors, names, categories) correspond to quantitative outcomes of the uncertain quantity (light wavelength, number of letters, classification number). Uncertain quantities are important in decision analysis because they permit us to build models that may be subjected to quantitative analysis. 7.3. P(A and B) = 0.12 P(B ) = 0.35 P(A and B ) = 0.29 P(B | A) = 0.12 0.41 = 0.293 P(A) = 0.41 P(A | B) = 0.12 0.65 = 0.185 P(B) = 0.65 P(A | B ) = 0.06 0.35 = 0.171 7.4. P(A or B) = P(A and B) + P(A and B ) + P(A and B) = 0.12 + 0.53 + 0.29 = 0.94 or P(A or B) = P(A) + P(B) - P(A and B) = 0.41 + 0.65 - 0.12 = 0.94 or P(A or B) = 1 - P(A and B ) = 1 - 0.06 = 0.94 7.5. A

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## This note was uploaded on 12/04/2011 for the course BUSINESS 500 taught by Professor John during the Spring '11 term at Kansas.

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Solutions Chapter 7A - Solutions 7.1 We often have to make...

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