Question
Before making a final decision on the production plan to adopt, the bakery's manager decides to contact Professor Leung in the Math Department to conduct
Before making a final decision on the production plan to adopt, the bakery's manager decides to contact Professor Leung in the Math Department to conduct a market research survey. The results of the survey will indicate either favourable or unfavourable market conditions for premium breads. In the past, when there was medium demand, Professor Leung's predictions were favourable 43% of the time. The professor's predictions have also been unfavourable given low demand 90% of the time, and favourable given high demand 77% of the time. Assume prior probabilities of 0.2 and 0.3 for medium and low demand respectively.
a.) Calculate posterior (revised) probabilities and enter them in the table below. Round answers to 3 decimal places; do not round intermediate results. Note: The first cell of the table representsP(Low | Favourable) The last cell of the table representsP(High | Unfavourable)
Low | Medium | High | |
---|---|---|---|
Favourable | |||
Unfavourable |
b.) Determine the marginal probabilities of favourable and unfavourable predictions. P(Favourable)=P(Favourable)= P(Unfavourable)=P(Unfavourable)=
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started