The CEO must present a plan to the board whether to build a small plant or a large plant for the company.The payoff table (in $) is as follows:

Before the board meeting, the CEO obtained a market demand forecast report. In the past, when the demand was high, the forecast indicated high demand 80% of the time.When the demand was low, the forecast indicated low demand 70% of the time. The latest forecast indicateshighdemand.

1. Compute the revised probabilities with Bayes' rule now that you know that the latest forecast indicateshighdemand.
2. Interpret the impact of the latest forecast on the prior probabilities

The CEO must present a plan to the board whether to build a small plant or a large plant for the company. The payoff table (in 3) is as follows: Action Event Probability Small plant Large plant High demand 0.65 270 480 Low demand 0.35 195 100 Before the board meeting, the CEO obtained a market demand forecast report. In the past, when the demand was high, the forecast indicated high demand 80% of the time. when the demand was low, the forecast indicated low demand 70% of the time. The latest forecast indicates mgh demand. 3. Compute the revised probabilities with Bayes' rule now that you know that the latest forecast indicates mgh demand. b. Interpret the impact of the latest forecast on the prior probabilities