Variation on the bernoulli process


Consider the following variation on the Bernoulli process: On trials three through five, the probability of success is a parameter w, but on all the other trials, the probability of success is 2/3. Every failure on trials three through five results in cost far above the cost of failure on any other trial. The value of w may be increased by investments in improving the process. Create an economic model for choosing a value of w and use it to produce some general guidelines.

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Basic Statistics: Variation on the bernoulli process
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