.jpg "probabilty tree diagrams")
pathString: This defines how the tree should be structured. The solution was to use the ee package and build the tree diagram with custom nodes. Calculate and display the joint or cumulative probabilities for each potential outcome. Take individual probabilities as inputs. Specifically, I needed something with the ability to: I created this example because there don’t seem to be many r packages with flexible outputs for tree diagrams. Taking the sum of all probabilities multiplied against their associated business outcome, Gracie calculates expected values for revenue, cost, and profit for her lemonade stand operations. She then uses her demand function to calculate revenue, cost, and profit expectations for each scenario based on: The least likely outcome is rain with a temperature of 95☏ (p=0.014). There is a probability of 0.396 associated with this. The most probable outcome is to have no rain and a temperature of 85☏. Gracie translates these probabilities into a tree diagram to get a better sense of all potential outcomes and their respective likelihoods. Probability of no rain: p(no rain) = 0.28įurther, she knows the temperature fluctuates widely depending on if it rains or not. When it rains, demand falls an additional 20% across the temperature spectrum. To generate a more realistic view of her business, and to inform ingredient purchasing decisions, Gracie collected historic data to help her better anticipate weather conditions. Glasses of Lemonade =−100+1.7×Temperature She has even estimated a demand equation based on temperature. Not surprisingly, people buy more lemonade on hot days with no rain than they do on wet, cold days. It didn’t take Gracie long to realize that weather has a huge impact on potential sales. It is a lot of work to prepare the stand and bring the right quantity of ingredients, for which she shops for every Friday after school for optimal freshness. Each Saturday, she sells lemonade on the bike path behind her house during peak cycling hours. You can find the single-function solution on GitHub. #Probabilty tree diagrams code
We start with a simple example and then look at R code used to dynamically build a tree diagram visualization using the ee library to display probabilities associated with each sequential outcome.
A tree diagram can effectively illustrate conditional probabilities.
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