suppose that sample information is available in the form of a random sample of consumers. For a
Question:
suppose that sample information is available in the form of a random sample of consumers. For a sample size of one a) find the posterior distribution if the one person sampled will purchase the item, and find the value of this sample information. b) find the posterior distribution if the one person sample will NOT purchase the item, and find the value of this sample information. c) find the expected value of sample information. A store must decide whether or not to stock a new item. The decision depends on the reaction of consumers to the item, and the payoff table (in dollars) is as follows: 0.10 0.20 0.30 0.40 0.50 Stock 100 -10 -2 12 22 40 Stock 50 -4 6 12 16 16 Do Not Stock 0 0 0 0 0 P(0.10)=0.2, P(0.20)=0.3, P(0.30)=0.3, P(0.40)=0.1, P(0.50)=0.1