MECU 6551

Assignment #4 – Solutions
Due: Monday, March 26th, 2013 at the beginning of class.

Instructions: You are required to submit answers to only TWO of the following FOUR
questions.

Question 1
A market research group specializes in providing assessments of the prospects of sites for
new children toy stores in shopping centers. The group assesses prospects as good, fair,
or poor. The records of assessments made by this group were examined, and it was found
that, for all stores that had annual sales over $1,000,000, the assessments were good for
70%, fair for 20%, and poor for 10%. For all stores that turned out to be unsuccessful, the
assessments were good for 20%, fair for 30%, and poor for 50%. It is known that 60% of
new clothing stores are successful and 40% are unsuccessful.

Using the information above, in particular, the conditional probabilities (given success
or no success) can be used to begin to partially determine the content of the cells of the
table below:

S S
P(G and S) = P(G | S)P(S) P(G and S ) = P(G | S )P(S ) P(G) = P(G and S)
G = 0.7 ⋅ 0.6 = 0.2 ⋅ 0.4 +P(G and S )
= 0.42 = 0.08 = 0.5

F P(F and S) =? P(F and S ) =? P(F) =?

P P(P and S) =? P(P and S ) =? P(P) =?

P(S) = 0.6 P(S ) = 0.4 1

a) For a randomly chosen store, what is the probability that prospects will be assessed as
good?
P(G) = P(G and S) + P(G and S )
= P(G | S)P(S) + P(G | S )P(S )
= 0.7(0.6) + 0.2(0.4)
= 0.5 = 50%
b) If prospects for a store are assessed as good, what is the probability that it will be
successful?
P(G and S) P(G | S)P(S) 0.7(0.6)
P(S | G) = = = = 0.84 = 84%
P(G) P(G) 0.5  
Essentially, you must apply Bayes’ Rule.

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MECU 6551 Assignment #4 – Solutions 2013

c) Are the events “Prospects assessed as good” and “Store is successful” statistically
independent?
Method 1
If S and G are independent, then:
INDEPENDENT
P(S | G) = P(S)
Verify:  
Left hand side = P(S | G) = 0.84 ( from (b)) Right hand side = P(S) = 0.6 (given)

Since these are not the same, S and G are NOT INDEPENDENT.

Method 2
If S and G are independent, then:
INDEPENDENT
P(G | S) = P(G)
Verify:  

Left hand side = P(G | S) = 0.7 (given) Right hand side = P(G) = 0.5 ( from (a))

Since these are not the same, S and G are NOT INDEPENDENT.

Method 3
INDEPENDENT
P(G and S) = P(G) ⋅ P(S)
Verify:

Left hand side = P(G and S) = 0.42 Right hand side = P(G)P(S) = 0.5⋅ 0.6 = 0.3

Since these are not the same, the events are NOT INDEPENDENT.

d) Suppose that five stores are chosen at random. What is the probability that at least one
of them will be successful?

In UNIT 5 we learn about the binomial distribution and the binomial formula that we
can use to solve the problem. However, we can apply the multiplication rule (Rule 5)
just as well:
1− P(all unsuccessful) = 1− P(S and S and S and S and S )
= 1− P(S )P(S )P(S )P(S )P(S )
= 1− 0.4 5
= 1− 0.01024
= 0.9898
= 98.98%
 MECU 6551 Assignment #4 – Solutions 2013
 

Question 2
A record store owner assesses customers entering the store as high school age, college
age, or older, and finds that of all customers 30%, 50%, and 20%, respectively, fall into
these categories. The owner also found that purchases were made by 20% of high school
age customers, by 60% of college age customers, and by 80% of older customers.
Using the information above, in particular, the conditional probabilities for being a
buyer (B), given high school, college or an older customers, can be used to determine the
cells of the table below:

B B
P(H and B)
= P(B | H )P(H )
H P(H and B) = 0.3− 0.06 = 0.24 P(H ) = 0.3
= 0.2 ⋅ 0.3
= 0.06
P(C and B)
= P(B | C)P(C)
C P(C and B) = 0.5 − 0.3 = 0.2 P(C) = 0.5
= 0.6 ⋅ 0.5
= 0.3
P(O and B)
= P(B | O)P(O)
O P(O and B) = 0.2 − 0.16 = 0.04 P(O) = 0.2
= 0.8⋅ 0.2
= 0.16
P(B) P(B)
= P(H and B) + P(C and B) + P(O and B) = P(H and B) + P(C and B) + P(O and B)
1
= 0.06 + 0.3+ 0.16 = 0.24 + 0.2 + 0.04
= 0.52 = 0.48

a) What is the probability that a randomly chosen customer entering the store will make
a purchase?

From the above table, P(B) = 0.52 = 52% .

b) If a randomly chosen customer makes a purchase, what is the probability that this
customer is high school age?

Using the information from the above table,

P(H and B) 0.06

P(H | B) = = = 0.1154 = 11.54%
P(B) 0.52

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MECU 6551 Assignment #4 – Solutions 2013
 

Question 3
A robbery has been committed and COCO, the crime-fighting dog, has been called in to
investigate. He discovers that Sonya was seen wearing gloves in the neighborhood
shortly after the crime, and thus, he concludes that she should be arrested. From past
experience you know that 50% of the people that COCO says should be arrested for
robbery are actually guilty. Before making the arrest, you order some additional
investigation. From a large population of convicted robbers you find that 60% wore
gloves at the time of the crime and continued to wear them for an interval after the crime.
Further investigation reveals that 80% of the people in the neighborhood of the crime
were wearing gloves around the time of the crime.
a) Based on the fact that Sonya was wearing gloves, what is the probability that Sonya
actually committed the crime?
The information given is:
P(R) = 0.5
P(G | R) = 0.6
P(G | R) = 0.8

And we are asked to find P(R | G) :

P(R and G) P(G and R)

P(R | G) = =
P(G) P(G and R) + P(G and R)

We can use the information given to solve:

P(R and G) P(G and R) P(G | R)P(R)

P(R | G) = = =
P(G) P(G and R) + P(G and R) P(G | R)P(R) + P(G | R)P(R)
0.6 ⋅ 0.5
=
0.6 ⋅ 0.5 + 0.8⋅ 0.5
0.3
=
0.7
= 0.4286 = 42.86%
b) If you charged her with the crime, do you think a jury would convict her based on the
glove evidence? Explain why or why not.

Probability of being a robber is 50%, while the chance that an individual is a robber
given that they are wearing gloves is 43%. So wearing gloves actually reduced the
probability of being a robber. So “NO” the jury would not convict based on the glove
evidence.

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MECU 6551 Assignment #4 – Solutions 2013
 

Question 4
After meeting with the regional sales managers Lauretta Anderson, president of Cowpie
Computers Inc., you find that she believes that the probability that sales will grow by
10% in the next year is 0.70. After coming to this conclusion, she receives a report that
John Cadariu of Minihard Software Inc. has just announced a new operating system that
will be available for customers in 8 months. From past history she knows that in
situations where growth has eventually occurred, new operating systems have been
announced 30% of the time. However, in situations where growth has not eventually
occurred, new operating systems have been announced 10% of the time. Based on all of
these facts, what is the probability that sales will grow by 10%.

P(G) = 0.7
P(S | G) = 0.3
P(S | G) = 0.1
P(G and S) P(S | G)P(G) 0.3⋅ 0.7
P(G | S) = = = = 0.8750 = 87.5%
P(S) P(S | G)P(G) + P(S | G)P(G) 0.3⋅ 0.7 + 0.1⋅ 0.3

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