Statistics and Probability

[Exercise 1a] a. For this situation, discuss why it is important to base improvement advice on reliable, objective data here rather than experience or gut instinct. [Select exactly 3 statements that best address the question]

A. Biased assessments of confidence lead to decisions that result in bad outcomes more frequently than would be expected from chance or bad luck. This may make the company liable for losses for not advising clients responsibly.

B. If the sales price increase from an improvement is greater than the cost then the advice is to invest in the improvement. There is no uncertainty in making this decision and so there no need to use experience or gut-instinct, only hard facts.

C. Without reliable objective data we cannot guarantee the benefit of an improvement will exceed the cost. This guarantee is necessary because the company is liable for losses for not advising clients responsibly.

D. The decision relies on having a reliable assessment of the confidence that an improvement will increase the selling price more than the cost for the improvement. Without justifiable confidence in this the decision is arbitrary and the advice is useless.

E. Experience or gut instinct give the company a fundamental competitive advantage. Giving advice based on objective data enables the company to maintain this advantage.

F. Assessments of confidence based only on experience or gut instinct are likely to be over-confident or under-confident(i.e. biased). A client could blame this bias for a bad outcome possibly hurting the reputation of the company.

Please send me answer ASAP.