As Marketing Director at the Hauck Corporation, you try to keep informed about the actions of your main competitor, Campbell Labs. Currently you believe that Campbell may have plans to introduce a significant new product within the next two years. You put the chance of that happening at 30%. You also believe that if Campbell is planning to introduce a new product, there’s a 60% chance that they will build a new plant. If a new product wasn’t being planned, you estimate that the chance Campbell would build a new plant is only 10%. Draw a probability tree and use it to answer the following questions
a. What’s the likelihood that Campbell will build a new plant?
b. Suppose you learn that Campbell is building a new plant. How likely is it that Campbell plans to introduce the new product?