A consulting firm submitted a bid for a research project The

A consulting firm submitted a bid for a research project. The firms management felt that they had a 50-50 chance of getting the project. However, the agency to which the bid was submitted requested additional information. Past experience indicates that for 85% of the successful bids and 35% of the unsuccessful bids the, the agency requested additional information. (Take numbers out to Four Significant Digits) What is the probability of the bid being successful (that is prior to the request for additional information)? What is the conditional probability of a request for additional information given that the bid will ultimately be successful? Compute the posterior probability that the bid will be successful given a request for additional information.

Solution

a) .5 b) .74 c) Using Bayes Law it is: .5*.74/(.5*.74 + .5*.39)