A construction company has submitted bids on two separate st

A construction company has submitted bids on two separate state contracts, A and B. The company feels that it has a 20% chance of winning contract A and a 30% chance of winning contract B. Furthermore, the company believes that it has a 60% chance of winning contract A if it wins contract B.

What is the probability of winning contract A and contract B?

Solution

CASE 1 WHEN CONTRACT B IS WON

THEN PROBABILITY OF WINNING THE CONTRACT A IS 0.6

CASE 2 WHEN CONTRACT B IS LOST

THEN PROBABILITY OF WINIING THE CONTRACT A IS 0.2

FOR PROBABILITY OF WINNING THE CONTRACT B IS 0.3