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 high demand, Professor Leung's predictions were unfavourable 34% of the time. The professor's predictions have also been favourable given medium demand 58% of the time, and unfavourable given low demand 74% of the time. Assume prior probabilities of 0.1 and 0.4 for medium and high demand respectively.
- 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 represents P(Low | Favourable) The last cell of the table represents P(High | Unfavourable)
Low | Medium | High |
---|---|---|
Favourable | ||
Unfavourable |
- Determine the marginal probabilities of favourable and unfavourable predictions. P(Favourable)=P(Favourable)= P(Unfavourable)=P(Unfavourable)=
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