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Building permits were issued last year to three contractors starting up a new subdivision: Tara Construction built two houses; Westview, three houses; and Hearthstone, six houses. Tara’s houses have a 60% probability of developing leaky basements; homes built by Westview and Hearthstone have that same problem 50% of the time and 40% of the time, respectively. Yesterday, the Better Business Bureau received a complaint from one of the new homeowners that his basement is leaking. Who is most likely to have been the contractor?

Solution

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Let

A1A_1= Tara Construction

A2A_2= Westview

A3A_3= Hearthstone

BB=Leaky basement

Given:

P(BA1)=60%=0.6P(B|A_1)=60\%=0.6

P(BA2)=50%=0.5P(B|A_2)=50\%=0.5

P(BA3)=40%=0.4P(B|A_3)=40\%=0.4

Bayes's theorem:

P(AiB)=P(BAi)P(Ai)j=1kP(BAj)P(Aj)P(A_i|B)=\dfrac{P(B|A_i)P(A_i)}{\sum_{j=1}^k P(B|A_j)P(A_j)}

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