The size of the price discount offered by an industrial marketing manager varies according to order size. During the last quarter, the manager offered price discounts of 20% to one half of his customers and 30% to one-quarter of his customers, and no discount to the rest. He estimates that the probability of receiving a reorder this quarter is 0.90 if the customer received a 20% discount, 0.92 if the customer received a 30% discount, and 0.70 if the customer received no discount. a) If a customer is selected at random and is observed not to have reordered, what is the probability that this customer was offered no discount last quarter? b) If a customer is selected at random and is observed to have reordered, what is the probability that this customer was offered a 30% discount last quarter? I know I am not presenting this in the right way (formula) but can someone tell me if the logic is flawed? This is for part a) Discount # of Customers Reorder Will reorder Won't reorder 20% 50 90% 45 5 30% 25 92% 23 2 0% 25 70% 17.5 7.5 Probability randomly selected non reordering customer was offered no discount = 7.5%
Nope, I get 20.5%. Edit: Scratch that. I thought b) was asking for the no discount case. Probability it was 30% discount would be 26.9% I believe.
Okay, I get you, we're looking at the probability among non reordering customers not ALL of the customers. Thanks!