Questions 1, 2 and 3 are based on the following table. In the following table of costs, n1 and n2 are the states of nature, and a1, a2 and a3 are your decision alternatives: n1 n2 a1 5 3 a2 1 4 a3 2 k Q.1. Suppose k = 6. If n1 occurs with probability p, If n1 occurs with probability p, for what values of p will a3 be the best decision alternative based on expected values, for what values of p will a1 be the best and for what values of p will a2 be the best? Q.2. Suppose n1 occurs with probability p. For what all values of k is a3 always better than a1 (based on expected values)? Q.3. What is the EVPI?
Contingency Table
A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.
Binomial Distribution
Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.
Questions 1, 2 and 3 are based on the following table. In the following table of costs, n1 and n2 are the states of nature, and a1, a2 and a3 are your decision alternatives:
n1 n2
a1 5 3
a2 1 4
a3 2 k
Q.1. Suppose k = 6. If n1 occurs with
Q.2. Suppose n1 occurs with probability p. For what all values of k is a3 always better than a1 (based on expected values)?
Q.3. What is the EVPI?
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