alternatives big average small large stock $22000 $ 12000 $-2000 average stock $14000 $10000 $6000 small stock $9000 $8000 $4000 the probabilities associated with states of nature are 0.3 for a big demand, 0.5 for an average demand, and 0.2 for a small demand. how do you compute expected monetary value (EMV) and expected value of perfect value (EVPI) ? a) determine the alternative that provides andrew the greatest expected monetary value (EMV). b} compute the expected value of perfect information (EVPI). compute EMV AND EVPI?
alternatives big average small
large stock $22000 $ 12000 $-2000
average stock $14000 $10000 $6000
small stock $9000 $8000 $4000
the probabilities associated with states of nature are 0.3 for a big demand, 0.5 for an average demand, and 0.2 for a small demand.
how do you compute expected monetary value (EMV) and expected value of perfect value (EVPI) ?
a) determine the alternative that provides andrew the greatest expected monetary value (EMV).
b} compute the expected value of perfect information (EVPI).
compute EMV AND EVPI?
Given that -
|
Alternatives |
Big |
Average |
Small |
|
Large Stock |
$22,000 |
$12,000 |
-$2,000 |
|
Average Stock |
$14,000 |
$10,000 |
$6,000 |
|
Small Stock |
$9,000 |
$8,000 |
$4,000 |
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