DEPARTMENT OF GENERAL MANAGEMENT DISCUSSION QUESTIONS FOR PROBABILITY THEORY research survey. people are interviewed about product usage. One of the guestions is about the brand of toothpaste used. If it is known that 14% of the population use a randomly chosen person will be pd A and 9% use brand B, What is the probability that ‘wo brands? (Assume that only one brand is used at a given time), br a user of one of the Example 2 Television commercials are designed to appeal to the most likely viewing audience of the sponsored programme. However, one study conducted by the UDSM found that children nding of commercials, even for those designed to especially nding TV often have a very low underst This study shows that the percentages of children und appeal to them. ‘ommercials in different age groups are as given in the table below: Response — Zz Age Group pale 5-7 [8-10 1-13 | Understand i 45% 60% 85% 40% | 15% { Do not unders In line with the findings, suppose an advertising agent has shown a television commercial to @ six year old child and another to a nine year old child in a laboratory experiment in order to test their understanding of commercials, Required: find the probability that both children demonstrate an understanding of the TV a) commercial b) find the probability that one or the other child demonstrates an understanding of the TV commercial ©) Find the probability that one child demonstrates an understanding of the TV commercial but the other does not Example 3 A financial Services firm carries an advertising in a newspaper. The firm estimates that 60% of the people in the potential area read the newspaper. The research further shows that 85% of the people who read the newspaper remember seeing the advertisement when questioned about it afterward. What percentage of the people in the firm’s potential market see and remember the advertisement? Example 4 An electronic device has four independent components with a reliability of 0.85 each. The device works only if all four components are functional, What is the probability that the device will work when needed?Example $ ‘ package of documents needs to be sent to Mwanza, and it is important that it arrives within one day. To maximize the chances of on-time delivery, three copies of the documents are sent via three different delivery services, A, B and C. Service A is known to have a 90% ime delivery record, service B has an 88% on-time delivery record, and the record for service C is 92% on time delivery. What is the probability that the document will arrive at Mwanza on time? Example 6 The probability that a bank customer will default on a loan is 0.4 if the economy is high and 0. 13 if the economy is not high. Suppose the probability that the economy will be high is 0.65, What is the probability that the person will default on the loan? Example 7 Consider the test for an illness. The test has a known reliability: i) When administered to a person who is ill, the test will indicate so with a probability of 0.92 ii) When administered to a person who is not ill, the test will erroneously give @ positive result with a probability of 0.04. Suppose the illness is rare and known to affect only 2% of the entire population. Ifa person is selected randomly from the entire population and given the test and the result is positive a) Whats that probability that the person is ill? b) Whats the probability that the test will indicate a positive