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Decision Science2

The document discusses three topics: 1. It calculates the probability of having a heart attack given a person has periodontal disease using Bayes' theorem. The probability is 24.6%. 2. It performs a regression analysis to understand the relationship between Instagram followers and number of posts per day. It finds a positive linear relationship with a slope of 1.736. 3. It calculates the replacement interval for light bulbs to ensure less than 10% expire prematurely, finding the interval should be approximately 94 days.

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ARPIT JAIN
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29 views

Decision Science2

The document discusses three topics: 1. It calculates the probability of having a heart attack given a person has periodontal disease using Bayes' theorem. The probability is 24.6%. 2. It performs a regression analysis to understand the relationship between Instagram followers and number of posts per day. It finds a positive linear relationship with a slope of 1.736. 3. It calculates the replacement interval for light bulbs to ensure less than 10% expire prematurely, finding the interval should be approximately 94 days.

Uploaded by

ARPIT JAIN
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Answers – Decision Science

Arpit Jain

1. Introduction

Event D represents that people who have periodontal disease The event H represents people who
have a heart attack.

From the given information, the notations are,

The prior probabilities are, P(H)= 0.1

The complementary is,

P(HC)-EDUCATION

=1-0.10

= 0.90

The posterior probabilities are,

P(D/H) 0.85

P(D/Hc) = 0.29

We have to find the probability that he or she will have a heart attack. if the person has periodontal
disease.

That is, we have to find P(H)

Substituting the prior and likelihood (posterior) probabilities into the Bayes's Law formula, then it
yields,

P(D/H) = [P(D/H) P(H)]/[P(D/H) P(H) + P(D/Hc) P(He)] -[(0.85) (0.10)]/[(0.8.5) (0.10)+ (0.29)* (0.90)]

-0.085/0.346

= 0.246

Conclusion -

Therefore, the probability that he or she will have heart attack if the person has the periodontal
disease is 0.246.

Tree diagram:
2. Introduction

Regression Statistics
Multiple R 0.11059024
R Square 0.0122302
Adjusted R Square 0.07756705
Standard Error 63.0282592
Observations 13

ANOVA

Particular df SS MS F Significance F
541.054712 541.0547 0.136197
Regression 1 9 1 9 0.719095592
1 43698.176 3972.5615
Residual 1 6 5
1 44239.2307
Total 2 7

Standard t P Lower Upper Lower Upper


Particulars Coefficients Error Stat value 95% 95% 95% 95%
365.02 9.03 0.00 267.10 453.93 276.10 453.93
Intercept 1 40.397 6 0 8 4 8 4
0.36 0.71
2 4.063 11.01 9 9 -20.17 28.297 -20.17 28.297
No. of followers No. of post per day (X-mean of X)
Y X X-Mean of X (X-mean of X)^2 Y-mean of Y (Y-mean of Y)
439 2 -1.2143 1.4745 56.2143 -68.26020408
340 1 -2.2143 4.9031 -42.7857 94.73979592
315 4 0.7857 0.6173 -67.7857 -53.26020408
444 5 1.7857 3.1888 61.2143 109.3112245
377 2 -1.2143 1.4745 -5.7857 7.025510204
456 5 1.7857 3.1888 73.2143 130.7397959
495 2 -1.2143 1.4745 112.2143 -136.2602041
304 2 -1.2143 1.4745 -78.7857 95.66836735
401 5 1.7857 3.1888 18.2143 32.5255102
305 5 1.7857 3.1888 -77.7857 -138.9030612
338 4 0.7857 0.6173 -44.7857 -35.18877551
348 2 -1.2143 1.4745 -34.7857 42.23979592
402 1 -2.2143 4.9031 19.2143 -42.54591837
395 6 1.7857 3.1888 12.2143 21.81122449
5359 45 0 34.3571 0 59.6429

N=14

Sum of X = 45

Sum of Y = 5359

Mean X = Sum X/N = 45/14 = 3.2143

Mean Y = Sum Y/N = 5359/14 = 382.7857

Sum of squares (SSX) = 34.3571 S

um of products (SP) = 59.6429

Regression Equation = y = bX+ a

b= SP/SSX = 59.64/34.36 = 1.73597

a = MY - bMX = 382.79 - (1.74 3.21)=377.20582

y = 1.73597X+377.20582

Conclusion: Regression is a very useful statistical method. One can validate any business decision to
validate a hypothesis that a particular action will increase a division's profitability based on the
regression between the dependent and independent variables. Therefore, the regression analysis
equation plays a very important role in finance. In addition, a lot of forecasting is performed using
regression.
A slope of 1.736 represents the estimated change in Instagram followers for every increase in no. of
post per day. The slope of the line is positive, so there is a positive linear relationship, i.e., as one
increases, the other also increases.

3. (a)

A) Mean life of light bulbs (µ) = 120 days

Standard deviation (c)=20 days

Number of light bulbs (n) = 1000

z=(x-)/σ = (x-120)/20

Percentage of bulbs that should not expire before replacement = 90% = 0.9

We need to find the interval between replacements such that not more than 10% of the bulbs expire
before replacement.

We know that the distribution of the length of life of bulbs is normal. Hence, we can use the
standard normal distribution table to find the corresponding z-value for the given percentage.

Now, we can use the formula for the standardized normal distribution to find the corresponding
value of x (length of life of bulbs) for the given z-value -

The z-score for an area of 10% to the left of it is equal to -1.281551567 or -1.282.

Substituting the given values, we get

-1.282 (x 120)/20

Solving for x, we a

x=120 1.282 20

x=94.36 days (approximately)

Therefore, the interval between replacements should be around 94 days (rounded off to the nearest
whole number) to ensure that not more than 10% of the bulbs expire before replacement.

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