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Statistics and Probability

A retail grocer has decided to market organic "health food" and will purchase a new line of products from each of two suppliers. Unknown to the grocer, the two suppliers are in financial distress. Past experience has shown that, for firms with similar credit histories, the probability that bankruptcy will be initiated one year is .7. We are interested in observing the financial progress of the two supplies over the next year.

For this experiement, the simple events and their associated probabilites are as follows (B1: Supplier 1 declares bankruptcy; N1: Supplier 1 does not declare bankruprcy, etc.):

The Simple Events (B1, B2),(B1, N2),
(N1, B2) and (N1, N2) have probabilities equal to .49,.21,.21, and .09 respectively.

Compute the probabilities of each of the following events:

D: {Neither supplier declares bankruptcy during the next year}
F: {At least one supplier declares bankruptcy during the next year}

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This problem deals with a probability. A probability provides a quantitative description of the likely occurrence of a particular event.

Probability is conventionally expressed on a scale from 0 to 1; a rare event has a probability close ...

Solution Summary

This solution explains probability and provides the solution to the probability problem. It also provided an excellent resource of definitions, formulas, and other examples.