Hi guys, can ne1 help with this prob......... its nt gmat but still a ps, pls help urgently
Q. Gary's Pipe and Steel Company expects next year's sale to be $800 000 if the economy is strong, $500 000 if the economy is steady and $350 000 if the economy is weak. Gary believes there is a 20% probability that the economy will be strong, a 50% probability that the economy will be steady, and a 30% probability that the economy will be weak. What is the expected level of sales for next year?
pls help
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Dunno, if this is the correct ay to solve it. I just found the average using the projected sales and probabilities.
(800000*0.2) + (500000*0.5) + (350000*0.3)
= 160000 + 250000 + 105000 = 515000
Am I right?
(800000*0.2) + (500000*0.5) + (350000*0.3)
= 160000 + 250000 + 105000 = 515000
Am I right?
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lawalx, I really don;t know the approach to solve this but the problem seems to me very interesting. I have made some wild guess u can say -
Best Better Good
Profit : 8x10^6 5x10^6 3.5x10^6
Possibility: 50 30 20
Here the maximum possibility is for going better or the best. So from only this point, we can say that the profit should be between 8x10^6 and 5x10^6. Now this can be an approach.
Now diff between the profit and possibility are 1.5x10^6, 3x10^6 and 10, 20 - doubling the diff from the previous one. So the profit can be 6.5x10^6.
Is it so? What is the OA?
Mind it - I am making a wild guess to catch the approach. May be I am not correct!
Best Better Good
Profit : 8x10^6 5x10^6 3.5x10^6
Possibility: 50 30 20
Here the maximum possibility is for going better or the best. So from only this point, we can say that the profit should be between 8x10^6 and 5x10^6. Now this can be an approach.
Now diff between the profit and possibility are 1.5x10^6, 3x10^6 and 10, 20 - doubling the diff from the previous one. So the profit can be 6.5x10^6.
Is it so? What is the OA?
Mind it - I am making a wild guess to catch the approach. May be I am not correct!
Correct me If I am wrong
Regards,
Amitava
Regards,
Amitava
- jayhawk2001
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I think the question is asking for a weighted average
i.e. .2 * 800k + .5 * 500k + .3*350k
i.e. .2 * 800k + .5 * 500k + .3*350k