Before marketing new products nationally, companies often test them on samples of potential customers. Such tests have a known reliability. For a particular product type, a test will indicate success of the product 75% of the time if the product is indeed successful and 15% of the time when the product is not successful. From past experience with similar products, a company knows that a new product has a 0.60 chance of success on the national market. If the test indicates that the product will be successful, what is the probability that it really will be successful?
Contingency Table
A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.
Binomial Distribution
Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.
Before marketing new products nationally, companies often test them on
samples of potential customers. Such tests have a known reliability. For a particular product type, a test will indicate success of the product 75% of the time if
the product is indeed successful and 15% of the time when the product is not successful. From past experience with similar products, a company knows that a
new product has a 0.60 chance of success on the national market. If the test indicates that the product will be successful, what is the probability that it really will
be successful?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
