EBK STATISTICS FOR BUSINESS & ECONOMICS
12th Edition
ISBN: 9780100460461
Author: Anderson
Publisher: YUZU
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Chapter 21.4, Problem 16E
To save on expenses, Rona and Jerry agreed to form a carpool for traveling to and from work. Rona preferred to use the somewhat longer but more consistent Queen City Avenue. Although Jerry preferred the quicker expressway, he agreed with Rona that they should take Queen City Avenue if the expressway had a traffic jam. The following payoff table provides the one-way time estimate in minutes for traveling to and from work.
| State of Nature | ||
| Expressway Open | Expressway Jammed | |
| Decision Alternative | s1 | s2 |
| Queen City Avenue, d1 | 30 | 30 |
| Expressway, d2 | 25 | 45 |
Based on their experience with traffic problems, Rona and Jerry agreed on a .15
In addition, they agreed that weather seemed to affect the traffic conditions on the expressway. Let
C = clear
O = overcast
R = rain
The following conditional probabilities apply.
| P(C | s1) 5= .8 | P(O | s1) = .2 | P(R | s1) = .0 |
| P(C | s2) = .1 | P(O | s2) = .3 | P(R | s2) = .6 |
- a. Use Bayes’ theorem for probability revision to compute the probability of each weather condition and the conditional probability of the expressway open, s1, or jammed, s2, given each weather condition.
- b. Show the decision tree for this problem.
- c. W hat is the optimal decision strategy, and what is the expected travel time?
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Mary is a sales person for Challenge Furniture. She receives an incremental commission based on the table below. If she
sells $26,000 and has already received a draw of $766.15, how much commission is still owed to Mary?
Level
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1
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Chapter 21 Solutions
EBK STATISTICS FOR BUSINESS & ECONOMICS
Ch. 21.2 - Prob. 1ECh. 21.2 - A decision maker faced with four decision...Ch. 21.2 - Hudson Corporation is considering three options...Ch. 21.2 - Myrtle Air Express decided to offer direct service...Ch. 21.2 - The distance from Potsdam to larger markets and...Ch. 21.2 - Seneca Hill Winery recently purchased land for the...Ch. 21.2 - The Lake Placid Town Council has decided to build...Ch. 21.3 - Consider a variation of the PDC decision tree...Ch. 21.3 - A real estate investor has the opportunity to...Ch. 21.3 - Dante Development Corporation is considering...
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