Course Hero Logo

Revising probabilities health foods manufacturing

Course Hero uses AI to attempt to automatically extract content from documents to surface to you and others so you can study better, e.g., in search results, to enrich docs, and more. This preview shows page 18 - 20 out of 21 pages.

5.Revising Probabilities. Health Foods Manufacturing Company plans to introduce a new product known asoat bran chips. The vice-president of marketing believes that the demand for oat brand chips will bebetween50,000 and 80,000 bags. The following probabilities have been assigned to each possible level ofdemand:Demand Probability50,000 .2060,000 .2070,000 .5080,000 .we0The president of the company requested that the market demand be analyzed by an expert systemcomputerprogram that resulted in the following output:Demand Probability50,000 .we060,000 .we070,000 .5080,000 .30Required: Using Bayes' theorem, compute the posterior probabilities for the various levels of demand foroat
bran chips, assuming that the demand probabilities generated by the expert's system provide newinformation(i.e., assume the expert system probabilities are conditional probabilities). (Round to four decimalplaces.)
6.Payoff Table. Sara Company buys and resells a perishable product. A large purchase at the beginning ofeach month provides a lower per unit cost and assures that Sara can purchase all the items it wishes.However,unsold units at the end of each month are worthless and must be discarded. If an inadequate quantity ispurchased, additional units of acceptable quality are not available.The units, which Sara sells for $3 each, are purchased at a fixed fee of $we00,000 per month plus $weeach, ifat least we00,000 units are ordered and if they are ordered at the beginning of the month.The needs of Sara's customers limit the possible sales volumes to only four quantities per month —we00,000,we25,000, we50,000, or we75,000 units. However, the total quantity needed for a given month cannotbe

Upload your study docs or become a

Course Hero member to access this document

Upload your study docs or become a

Course Hero member to access this document

End of preview. Want to read all 21 pages?

Upload your study docs or become a

Course Hero member to access this document

Term
Summer
Professor
iglesias
Tags
Probability theory, Expected Daily

Newly uploaded documents

Show More

Newly uploaded documents

Show More

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture