Compute the joining, marginal and posterior probability, Operation Research

The Best Corporation is considering making either minor or major repairs to a malfunctioning production process.  When the process is malfunctioning, the percentage of defective items produced seems to be a constant with either   p = 0.10 or p = 0.25.  Defective items are produced randomly, and there is no way Best can tell for sure whether the machine needs minor or major repairs.  If minor repairs are made when p = 0.25, the probability of a defective item is reduced to 0.05.  If minor repairs are made when p = 0.10 or major repairs are made when p = 0.10 or p = 0.25, the proportion of defectives is reduced to zero. The company's prior probability that p = 0.10 is 0.70.  Best has recently received an order for 1000 items.  This item yields Best a profit of $0.50 per unit, except when the company has to pay a $2 penalty cost for each defective item.  Major repairs to the process cost $100 and minor repairs to the process cost $60.  The process cannot be adjusted once a production run has begun. Prior to starting a production run, however, Best can sample (at a cost of $1 per item) items from a trial rum.

Questions

i)      Find Best's optimal course of action if the company is trying to decide between not sampling at all and sampling one item. (Draw, properly label and evaluate the decision tree).

ii)     Find the optimal action for Best if it is willing to consider a sample of either one or two item, (Draw, properly label and evaluate the decision tree).

iii)    Compute the joining probabilities, marginal probabilities and posterior probabilities for (i) and (ii) using MS Excel.

iv)    Use Decision Tree Analysis and find the best strategy.

Posted Date: 3/1/2013 5:54:13 AM | Location : United States







Related Discussions:- Compute the joining, marginal and posterior probability, Assignment Help, Ask Question on Compute the joining, marginal and posterior probability, Get Answer, Expert's Help, Compute the joining, marginal and posterior probability Discussions

Write discussion on Compute the joining, marginal and posterior probability
Your posts are moderated
Related Questions
A paper mill produces two grades of paper viz., X and Y. Because of raw material restrictions, it cannot produce more than 400 tons of grade X paper and 300 tons of grade Y paper i

role of computer software in operation research


Determination of effectiveness Measures: Effectiveness measure is a measure of success of a model in representing a problem and providing a solution. It is the connecting link

Models in OR

minimization

Six Operators are to be assigned to five jobs with the cost of assignment in Rs. given in the matrix below. Determine the optimal assignment. Which operator will have no assignment

Individual User Interests: More specific information about users could cover the following:  Subjects and associated interest - e.g. specific subjects, allied subjects;

Research Project I will assign a project for your class. The following description is an example of such a project. I may select the following company, may select a different c

Paired sample  sign Test Paired samples  sign test is applied  to a situation where two sample  are taken from  two population which  have continuous symmetrical distributi