Question

The partner-manager of a franchise of Au Bon Pain, Inc., the French bakery restaurant chain, believes that the average daily revenue of her business may be viewed as a random variable (she adheres to the Bayesian philosophy) with mean $8,500 and standard deviation $1,000. Her prior probability distribution of average daily revenue is normal. A random sample of 35 days reveals a mean daily revenue of $9,210 and a standard deviation of $365. Construct the posterior distribution of average daily revenue. Assume a normal distribution of daily revenues.


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  • CreatedJune 04, 2015
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