Part B
Before making a final decision on the production plan to adopt, the bakery's manager decides to contact Professor Leung in the Math Department to conduct a market research survey. The results of the survey will indicate either favourable or unfavourable market conditions for premium breads.
In the past, when there was low demand, Professor Leung's predictions were unfavourable 78% of the time. The professor's predictions have also been favourable given high demand 77% of the time, and unfavourable given medium demand 56% of the time.
Assume prior probabilities of 0.1 and 0.4 for high and medium demand respectively.
Calculate posterior (revised) probabilities and enter them in the table below.
Round answers to 3 decimal places; do not round intermediate results.
Note:
The first cell of the table represents P(Low | Favourable)
The last cell of the table represents P(High | Unfavourable)
Low Medium High
Favourable
Unfavourable
Determine the marginal probabilities of favourable and unfavourable predictions.
P(Favourable)=P(Favourable)=
P(Unfavourable)=P(Unfavourable)=
