The Alternatives 1 and 2 in the Following Payoff Table

question 39

Multiple Choice

The alternatives 1 and 2 in the following payoff table represent the two possible manufacturing strategies that the EKA manufacturing company can adopt.The level of demand affects the success of both strategies.The states of nature (S₁) represent the levels of demand for the company products.S₁,S₂ and S₃ characterize high,medium and low demand with probabilities of .3,.6 and .1 respectively.The payoff values are in thousands of dollars. The management believes that the weather conditions significantly affect the level of demand.48 monthly sales reports are randomly selected.These monthly sales reports showed 15 months with high demand,28 months with medium demand,and 5 months with low demand.12 of the 15 months with high demand had favorable weather conditions.14 of the 28 months with medium demand had favorable weather conditions.Only 1 of the 5 months with low demand had favorable weather conditions.What is the probability that weather conditions are poor,given that the demand is high?

• A).2
• B).5
• C).8
• D).25
• E).75

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Definitions:

Right to an Attorney

The legal entitlement of individuals accused of crimes to have legal representation, whether provided by themselves or, if they are unable to afford one, appointed by the court.

Insider Trading

Conducting illicit trades on the stock exchange for individual advantage by using confidential data.

Tipping

The practice of giving extra money to service workers, over the basic price of the service, as a gesture of appreciation for their work.

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involves obtaining something, especially money, through force or threats, and is considered a criminal act.