1-20chapter stats

14 of the 28 months with medium demand had favorable

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Unformatted text preview: ue calculations are performed: (EMV)1 = (.1364)(110) + (.6818)(80) + (.1818)(70) = 82.28 (EMV)2 = (.1364)(60) + (.6818)(120) + (.1818)(50) = 99.09. Since 99.09 > 82.28, choose strategy 2. Expected payoff of sampling = (.56) (92.5) + (.44) (99.09) = 95.5 If there was no information about the weather conditions, then we use the prior probabilities to calculate the expected monetary value. (EMV)1 = (.3)(110) + (.6)(80) + (.1)(70) = 88 (EMV)2 = (.3)(60) + (.6)(120) + (.1)(50) = 95. 95 > 88, therefore choose strategy 2 EVSI = 95.5 - 95 = .5 or 500 dollars 1-1945 Chapter 01 - An Introduction to Business Statistics AACSB: Analytic Skills Bloom's: Application Difficulty: Hard Learning Objective: 2 Topic: Posterior Analysis 76. An automobile insurance company is in the process of reviewing its policies. Currently drivers under the age of 25 have to pay a premium. The company is considering increasing the value of the premium charged to drivers under 25. According to company records, 35% of the insured drivers are under the age of 25. The company records also show that 280 of the 700 insured drivers under the age of 25 had been involved in at least one automobile accident. On the other hand, only 130 of the 1300 insured drivers 25 years or older had been involved in at least one automobile accident. An accident has just been reported. What is the probability that the insured driver is under the age of 25? AACSB: Analytic Skills Bloom's: Application Difficulty: Hard Learning Objective: 2 Topic: Posterior Analysis 1-1946 Chapter 01 - An Introduction to Business Statistics 77. An automobile insurance company is in the process of reviewing its policies. Currently drivers under the age of 25 have to pay a premium. The company is considering increasing the value of the premium charged to drivers under 25. According to company records, 35% of the insured drivers are under the age of 25. The company records also show that 280 of the 700 insured drivers under the age of 25 had been involved in at least one automobile accident. On the other hand, only 130 of the 1300 insured drivers 25 years or older had been involved in at least one automobile accident. What is the probability that an insured driver of any age will be involved in an accident? AACSB: Analytic Skills Bloom's: Application Difficulty: Hard Learning Objective: 2 Topic: Posterior Analysis 1-1947 Chapter 01 - An Introduction to Business Statistics 78. A pharmaceutical company manufacturing pregnancy test kits wants to determine the probability of a woman not being pregnant when the test results indicate pregnancy. It is estimated that the probability of pregnancy among potential users of the kit is 10%. According to the company laboratory test results, 1 out of 100 non-pregnant women tested pregnant (false positive). On the other hand, 1 out of 200 pregnant women tested non-pregnant (false negative). A woman has just used the pregnancy test kit manufactured by the company and the results showed pregnancy. What is the probability that she is not pregnant? Let: P = pregnant NP = non-pregnant TP = tested pregnant TNP = tested non-pregnant AACSB: Analytic Skills Bloom's: Application Difficulty: Hard Learning Objective: 2 Topic: Posterior Analysis 1-1948 Chapter 01 - An Introduction to Business Statistics 79. A pharmaceutical company manufacturing pregnancy test kits wants to determine the probability of a woman actually being pregnant when the test results indicate that she is not pregnant. It is estimated that the probability of pregnancy among potential users of the kit is 10%. According to the company laboratory test results, 1 out of 100 non-pregnant women tested pregnant (false positive). On the other hand, 1 out of 200 pregnant women tested nonpregnant (false negative). A woman has just used the pregnancy test kit manufactured by the company and the results showed that she is not pregnant. What is the probability that she is pregnant? Let: P = pregnant NP = non-pregnant TP = tested pregnant TNP = tested non-pregnant AACSB: Analytic Skills Bloom's: Application Difficulty: Hard Learning Objective: 2 Topic: Posterior Analysis 1-1949 Chapter 01 - An Introduction to Business Statistics 80. The quality control manager for the NKA Inc. must decide whether to accept (alternative 1), further analyze (alternative 2), or reject (alternative 3) the shipment (lot) of incoming material. The historical data indicates that there is 30% chance that the lot is poor quality (S 1), 50% chance that the lot is fair quality (S2), and 20% chance that the lot is good quality (S3). Assume the following payoff table is available. The values in the payoff table are in thousands of dollars. What alternative action should be selected according to maximax criterion? Choose alternative 1, accept the lot. Max (90, 70, 80) = 90, therefore accept the shipment. AACSB: Analytic Skills Bloom's: Application Difficulty: Medium Learning Objective: 1 Topic: Decision Theory 1-1950 Chapter 01 - An Introduction to Business Statistics 81. The quality control man...
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