Iift 2009 Question 106
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IIFT 2009
Let x be the probability of investigation.
Let us indicate the event of the investigation happening to be I.
=>Event of investigation not happening = I'
Similarly, let us indicate the event of importing the technology to be T.
=> The event of technology not getting imported before the deadline = T'
The probability of Alpha getting the contract, P(A) = P(A|I&T)P(I&T)+P(A|I'&T)P(I'&T)+P(A|I&T')P(I&T')+P(A|I'&T')P(I'&T')
Alpha's chances of getting a contract:-
1. If Gamma is able to import the technology and there is no investigation by the Government, P(A|I'&T)P(I'&T) = 0.8*0.67*(1-x)
2. If there is investigation and Gamma Ltd is unable to import the technology in time, P(A|I&T')P(I&T') = 0.72*0.2*x
3. If both events occur, P(A|I&T)P(I&T) = 0.8*0.58*x
4. If none events occur,P(A|I'&T')P(I'&T') = 0.85*0.2*(1-x)
The probability of the contract being awarded to Alpha Ltd is = 0.8*0.67*(1-x) + 0.72*0.2*x + 0.8*0.58*x + 0.85*0.2*(1-x) 0.65
0.536 - 0.536x + 0.144x + 0.464x + 0.17 - 0.17x 0.65
i.e. 0.056 0.098x
i.e. 0.057 x
Therefore, option B is the right answer.