Decision on Uncertainty

Decision of Uncertainty Paper

University of Phoenix

Applied Business Research & Statistics

QNT/561

Sue Ashton

August 25, 2010

I was planning an airplane trip to Acapulco, Mexico, when the travel agency asked if I would like to buy Flight and Airline Accident Insurance and Medical Insurance. It was very obvious that the travel agent thought it would be a good idea to purchase these items just because I was traveling to Mexico. Flight insurance would cover an individual if the air was to crash, travel insurance would cover the individual is something was to happen to them in their travels. The medical insurance would cover someone if they were to get sick while visiting in Mexico.

I began to think to myself “what is the probability of an airplane crashing on the way to Mexico?” So I informed the travel agent that I would need to get back with her regarding the flight and travel and medical insurance. After doing some research I was surprise to find the probability of an airplane crashing was 1 in 11 million and there was a 67 chance of dying is there was to be an airplane crash (Wikianswer.com). In the year 2009 there were approximately 2.6 million Americans visiting Mexico and there were reports of 229 deaths and that Mexico is a considered a death trap.

It is reported that death in Mexico is 7 times more deadly than the second deadliest country of Costa Rica at 33 deaths. The probability of dying in Mexico is 0.000088 (the jetpacker.com/how many American die abroad each year). However, the other worry is in becoming very ill while visiting in Mexico. The probability of becoming ill in Mexico is 1 in 12.5 (www.bookofoddds.com/accidents/deaths). The odds of dying in a undeveloped country is 1 in 1,562 from an illness (www.bookokodd.com).

|Event |Prior Probability |Conditional Probability |Contingent Probability |Cost Insurance for 1 person |

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