Moiraine\'s Charms processes small gemstones into charm jewelry. Moiraine is try

Question

Moiraine's Charms processes small gemstones into charm jewelry. Moiraine is trying to decide if it should open a processing center in Iceland, Denmark, or both locations.

In Iceland, the probability of shutdown is 6% in any given year. In Denmark, the probability of shutdown is 8% in any given year.

What is the probability that any manufacturing plant is shut down if Moiraine's operates with two manufacturing plants?

What is the probability that both manufacturing plants are shut down if Moiraine's operates with two manufacturing plants?

Explanation / Answer

Probability that any manufacturing plant shut down = P(shutdown in Iceland only) + P(shutdown in Denmark only) = 0.06×(1 - 0.08) + 0.08×(1 - 0.06) = 0.1304

Probability that both manufacturing plants shut down = 0.06 × 0.08 = 0.0048

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