Case: Blake Electronics

Prior Probabilities Conditional probabilities from I&K

P(Successful venture) = 0.60 P(Fav survey | Succes) = 0.90
P(Unsuccessful venture) = 0.40 P(Unfav survey | Success) = 0.10
P(Fav survey | Failure) = 0.20
Probabilities from MAI P(Unfav survey | Failure) = 0.80
P(Successful venture | Fav survey) = 0.70
P(Unsuccessful venture | Fav survey) = 0.30 Posterior probabilities for I&K GIVEN Fav survey
P(Successful venture | Unfav survey) = 0.40 Conditional prob Prior Joint
P(Unsuccessful venture | Unfav survey) = 0.60 Outcome P(Fav survey | Outcome) prob prob
P(Favorable survey) = 0.50 Success 0.90 0.60 0.54
P(Unfavorable survey) = 0.50 Failure 0.20 0.40 0.08
P(Fav survey) = 0.62

Posterior probabilities for I&K GIVEN pilot fails

Conditional prob Prior Joint
Outcome P(Unfav survey | Outcome) prob prob
Success 0.10 0.60 0.06
Failure 0.80 0.40 0.32
P(Unfav survey) = 0.38
Fav survey
Posterior
prob
0.87
0.13

Posterior
prob
0.16
0.84
Blake Electronics

Introduce product

-$500,000 $800,000
0.50
Fav survey
1
$0 $800,000

No product

$0 -$100,000
Hire MAI

-$100,000 $500,000

Introduce product

-$500,000 $200,000
0.50
Unfav survey
1
$0 $200,000

No product

$0 -$100,000
Survey
1
$0 $500,000

Introduce product

-$500,000 $940,000
0.62
Fav survey
1
$0 $940,000

No product

$0 -$300,000