A chemical plant has an emergency alarm system. When an emergency situation exists, the alarm sounds with probability 0.95. When an emergency situation does not exist, the alarm sounds with probability 0.02. A real emergency situation is a rare event, with probability 0.004. Given that the alarm has just sounded, what is the probability that a real emergency situation exists?

6.56% probability that a real emergency situation exists.

Step-by-step explanation:

We have these following probabilities:

A 0.4% probability that a real emergency situation exists.

A 99.6% probability that a real emergency situation does not exist.

If an emergency situation exists, a 95% probability that the alarm sounds.

If an emergency situation does not exist, a 2% probability that the alarm sounds.

The problem can be formulated as the following question:

What is the probability of B happening, knowing that A has happened.

It can be calculated by the following formula

Where P(B) is the probability of B happening, P(A/B) is the probability of A happening knowing that B happened and P(A) is the probability of A happening.

In this problem:

What is the probability of a real emergency situation existing, given that the alarm has sounded.

P(B) is the probability of there being a real emergency situation. So .

P(A/B) is the probability of the alarm sounding when there is a real emergency situation. So P(A/B) = 0.95.

P(A) is the probability of the alarm sounding. This is 95% of 0.4%(real emergency situation) and 2% of 99.6%(no real emergency situation). So

P(A) = 0.95*0.04 + 0.02*0.996 = 0.05792

Given that the alarm has just sounded, what is the probability that a real emergency situation exists?

6.56% probability that a real emergency situation exists.