The daily profit from a juice vending machine placed in an office building is a value of a normal random variable with unknown mean μ and variance σ2. Of course, the mean will vary somewhat from building to building, and the distributor feels that these average daily profits can best be described by a normal distribution with mean μ0 = $30.00 and standard deviationσ0 = $1.75. If one of these juice machines, placed in a certain building, showed an average daily profit of x = $24.90 during the first 30 days with a standard deviation of s = $2.10, find
(b) a 95% Bayesian interval of μ for this building;
(c) the probability that the average daily profit from the machine in this building is between $24.00 and $26.00.
Probability and a Bayesian interval are found. The solution is detailed and well presented. T
Bayes' Theorem: Uses for Business-related Questions
Why is using Bayes' theorem important to help answer business-related questions? What does this theorem allow you to do that traditional statistics do not? What are some prerequisites for using Bayesian statistics?View Full Posting Details