Question

A certain agency employs two consulting firms (A and B) with probabilities 0.60 and 0.4, respectively. From past experience, it is known that the probability of cost overruns (wal you will) for the firms is 0.05 and 0.1, respectively. a) What is the probability of cost overrun b) Suppose a cost overrun is experienced by the agency, what is the probability that the consulting firm involved is company B2

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Abdul-Rahim Taysir

Answer 1

Answers chances of choosing firm A and getting a costo overun 1 PCA) = 0.60 chance of chosling from B and getting a cost overgun. : PCB) 0.40 is cost over run = 0.05 z O.1 PC OLA) P (016) Baye's tuom cesed, @ cohat is the probability of cost overskun ! POCA) *P(A) + PCOlC) x (B) (0.60 x0:05) + pro (0.4 x001) = 0.07 0.03 0.04 firm involved ☺ podbability that the consulting ling company B. PCB/0) = (PCO1 B) xPCB))/060) 0.04 6007 = 0.571