The operations manager for a local bus company wants to decide whether he should

Question

The operations manager for a local bus company wants to decide whether he should purchase a small or large new bus for his company he estimates that the annual profiles will vary depending upon whether passenger demand is low or high. The manager beliefs that there is about an 8 in 110 chance that demand will be high Which of the following statements is true? The manager should purchase the large bus The probability that demand will be low is higher than 50% Four profit figures are needed to make this decision The manager must choose the level of passenger demand None of the above

Explanation / Answer

The manager should purchase the large bus as the probability of high demand is 8/10, which is more that 0.5.

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