Question

Probability help

Just copy and paste the whole link.

http://s304.photobucket.com/user/tyronneguillory57/media/proba_zpsgf5peb6s.png.html?filters[user]=142571972&filters[recent]=1&sort=1&o=0

Both plan a and b will leave 10 people uncured and both will be the same cost. Unless I am doing something wrong. I have no idea which answer to choose. @amistre64

Answer 1

I think that, based on the probabilities, the second plan, or plan B, is the right answer

Answer 2

But don't both plans leave 10 people uncured?

Answer 3

why 10 people uncured?

Answer 4

Say there is 100 people. drug y will cure 60 percent leaving 40 uncured. Moving to drug x 75 percent of those 40 people will be cured meaning 30 of those 40 will be cured. So 10 people will be left uncured. Does that make sense or did I do something wrong.

Answer 5

yes I understand. So if we start with the drug X, then we get
25*0.6= 15 patient uncured,
is it right?

Answer 6

Those 15 people are cured out of those 25 leaving 10 uncured. So I am still getting 10 uncured.

Answer 7

sorry, you are right!

Answer 8

15 people cured and 10 people uncured

Answer 9

Right. But which would be the best answer? I'm confused.

Answer 10

we have to try with the overall cost

Answer 11

namely, we have to compute the overall cost for each plan

Answer 12

But wouldn't both end up being the same cost?

Answer 13

please wait I'm checking, your computation

Answer 14

I got this:
if we consider 100 people, then we have:
plan A: cost = $7725
plan B: cost = $7140

Answer 15

How did you get this? 88 plus 75= 163 dollars for one person
Wouldn't this be the case with both?

Answer 16

plan A:
75*88+15*75= 7725

Plan B:
60*75+30*88= 7140

Answer 17

Oh. Why do we need to multiply?

Answer 18

for example, if I apply plan A, then I have 75 people cured with drug X, namely
75*88
then I apply drug Y, and I have 15 people cured with drug Y, so
15*75

similarly for plan B

Answer 19

im not sure about my idea and it shouldnt persuade you one way or the other. but here is what im thinking, and its been awhile.

PlanA: .25(88) + 75
Xfails do Y

PlanB: .40(75) + 88
Yfails do X

Answer 20

insurance is concerned with cost, not with cures.

Answer 21

So plan A would be best as far as cost?

Answer 22

depends on if my idea is correct or not :)

Answer 23

Well I need to go now. Could I ask you for help later?

Answer 24

if we are around, sure

ill google to see if my idea is sound. .... might find an error in it.

Answer 25

ok. Thanks

Answer 26

revisions ...


PlanA: we expect to pay 88 to start with X, 25% of X is expected to fail and go to Y

total cost expected for planA is: X + .25 Y
---------------------------------------

planB: we expect to pay 75 to start with Y, 40% of Y is expected to fail and go to X

total cost expected for planB is: Y + .40 X