) The alternative that provides Deborah the greatest expected monetary value (EMv) is the EMV for this decision is $________ b) For Deborah, the expected value of the perfect information (EVPI)=$______
Deborah Hollwager, a concessionaire for the Amway cener in Orlando has developed a table of conditional values for the various altenatives(stocking decision) and state of nature (size of crowd)
Alternatives large average small
large inventory $20,000 $10,000 -$2,000
average inventory $12,000 $12,000 $8000
small inventory $10,000 $6,000 $5,000
probabilities associated with the states of nature are 0.35 for a large crowd, 0.50 for an average crowd, and 0.15 for a small crowd.
a) The alternative that provides Deborah the greatest expected monetary value (EMv) is
the EMV for this decision is $________
b) For Deborah, the expected value of the perfect information (EVPI)=$______
Step by step
Solved in 3 steps with 2 images
