Determine the probability during first year of purchase


Response to the following problem:

In a certain city three car brands A, B, C have 20%, 30% and 50% of the market share, respectively. The probability that a car needs major repair during its first year of purchase for the three brands is 5%, 10%, and 15%, respectively.

1. What is the probability that a car in this city needs major repair during its first year of purchase?

2. If a car in this city needs major repair during its first year of purchase, what is the probability that it is made by manufacturer A?

 

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Operation Management: Determine the probability during first year of purchase
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