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A expected monetary value b expected value of perfect

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Unformatted text preview: the weather conditions significantly affect the level of demand. 48 monthly sales reports are randomly selected. These monthly sales reports showed 15 months with high demand, 28 months with medium demand, and 5 months with low demand. 12 of the 15 months with high demand had favorable weather conditions. 14 of the 28 months with Medium demand had favorable weather conditions. Only 1 of the 5 months with low demand had favorable weather conditions. What is the probability that weather conditions are poor, given that the demand is high? What is the probability that weather conditions are poor, given that the demand is medium? What is the probability that weather conditions are poor, given that the demand is low? .2, .5, and .8 respectively AACSB: Analytic Skills Bloom's: Application Difficulty: Easy Learning Objective: 2 Topic: Posterior Analysis 1-1939 Chapter 01 - An Introduction to Business Statistics 70. The alternatives 1 and 2 in the following payoff table represent the two possible manufacturing strategies that the EKA manufacturing company can adopt. The level of demand affects the success of both strategies. The states of nature (SI) represent the levels of demand for the company products. S1, S2 and S3 characterize high, medium and low demand respectively. The payoff values are in thousands of dollars. The management believes that the weather conditions significantly affect the level of demand. 48 monthly sales reports are randomly selected. These monthly sales reports showed 15 months with high demand, 28 months with medium demand, and 5 months with low demand. 12 of the 15 months with high demand had favorable weather conditions. 14 of the 28 months with medium demand had favorable weather conditions. Only 1 of the 5 months with low demand had favorable weather conditions. Construct the revised probability table for favorable weather conditions and find the probability of high demand given that the weather conditions are favorable. .4286 AACSB: Analytic Skills Bloom's: Application Difficulty: Hard Learning Objective: 2 Topic: Posterior Analysis 1-1940 Chapter 01 - An Introduction to Business Statistics 71. The alternatives 1 and 2 in the following payoff table represent the two possible manufacturing strategies that the EKA manufacturing company can adopt. The level of demand affects the success of both strategies. The states of nature (SI) represent the levels of demand for the company products. S1, S2 and S3 characterize high, medium and low demand respectively. The payoff values are in thousands of dollars. The management believes that the weather conditions significantly affect the level of demand. 48 monthly sales reports are randomly selected. These monthly sales reports showed 15 months with high demand, 28 months with medium demand, and 5 months with low demand. 12 of the 15 months with high demand had favorable weather conditions. 14 of the 28 months with medium demand had favorable weather conditions. Only 1 of the 5 months with low demand had favorable weather conditions. Construct the revised probability table for poor weather conditions and find the probability of high demand given that the weather conditions are poor. .1364 AACSB: Analytic Skills Bloom's: Application Difficulty: Hard Learning Objective: 2 Topic: Posterior Analysis 1-1941 Chapter 01 - An Introduction to Business Statistics 72. The alternatives 1 and 2 in the following payoff table represent the two possible manufacturing strategies that the EKA manufacturing company can adopt. The level of demand affects the success of both strategies. The states of nature (SI) represent the levels of demand for the company products. S1, S2 and S3 characterize high, medium and low demand respectively. The payoff values are in thousands of dollars. The management believes that the weather conditions significantly affect the level of demand. 48 monthly sales reports are randomly selected. These monthly sales reports showed 15 months with high demand, 28 months with medium demand, and 5 months with low demand. 12 of the 15 months with high demand had favorable weather conditions. 14 of the 28 months with medium demand had favorable weather conditions. Only 1 of the 5 months with low demand had favorable weather conditions. If the weather conditions are favorable, determine which manufacturing strategy should the company should implement? Strategy 1 (EMV)1 = (.4286)(110) + (.5357)(80) + (.0357)(70) = 92.50 (EMV)2 = (.4286)(60) + (.5357)(120) + (.0357)(50) = 91.79 Since 92.5 > 91.79, choose strategy 1. AACSB: Analytic Skills Bloom's: Application Difficulty: Hard Learning Objective: 2 Topic: Posterior Analysis 1-1942 Chapter 01 - An Introduction to Business Statistics 73. The alternatives 1 and 2 in the following payoff table represent the two possible manufacturing strategies that the EKA manufacturing company can adopt. The level of demand affects the success of both strategies. The states of nature (SI) represent the levels of demand for the company product...
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