Use a Probability Tree to Find Probabilities

question 17

Multiple Choice

Use a probability tree to find probabilities.
-A mid-size company is transitioning to a new ERP system. Consequently, company
Files need to be modified and / or updated so as to be compatible for transfer to the new
System. The company is considering three alternatives to deal with this extra work load.
The difficulty level associated with file modification and transfer will affect the decision,
And initially the company believes there is a 20% chance the file modifications will be
Easy, a 40% chance that they will be moderately difficult and a 40% that they will be
Extremely difficult. The company decides to hire a consultant to review a sample of old
Files and provide her opinion as to whether the modifications required will be extensive
Or minor. Suppose the probabilities associated with her professional opinion are as
Follows: P (Minor | Easy) = 0.80, P (Minor | Moderately Difficult) = 0.50 and P (Minor |
Extremely Difficult) = 0.20. In other words, the chance that she will say the
Modifications required are minor given that the transfer will indeed be easy, moderately
Difficult and extremely difficult are 0.80, 0.50, and 0.20, respectively. What is the
Probability that the consultant will determine that the modifications required are minor?

• A) 0.57
• B) 0.20
• C) 0.32
• D) 0.44
• E) 0.90

---

Definitions:

External

Outside of or existing beyond the self or the entity it refers to, often used in contrast with internal.

Internal

Relating to or situated on the inside; intrinsic or inner attributes.

Likert Scale

A psychometric scale commonly involved in research that employs questionnaires. It is used for assessing attitudes by asking respondents to rate their level of agreement with a statement using a choice scale.

Attitudes

A settled way of thinking or feeling about something, typically reflected in a person's behavior.