International Logistics 4th Edition by Pierre David

Exercise 1

Suppose a particular disease has an incidence of 1 percent in the population. The test used to detect this disease has a 5 percent Type I error rate; there is no Type II error rate. A physician sees test results from a patient that indicates that the patient has that disease; the probability that the patient actually has that disease is 0.01/0.0595, or about 17 percent. Explain this result.