Homework 3 Decision Analysis Solutions

Homework 3 Decision Analysis Solutions - Homework 3...

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Homework 3 Solutions 1) a) 0.7 Weak -8 Introduce -0.2 0.3 Strong 18 2 0 Not Introduce 0 b) Do not introduce, EMV=0 c) Introduce 0.7 -8 Weak 2 0 Not Introduce 0 5.4 Introduce 0.3 18 Strong 1 18 Not Introduce 0 EVPI= EMV with PI-EMV with no info=5.4-0=5.4

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P(S)=0.3, P(W) = 0.7, P(P|W)=0.1, P(N|W)=0.9, P(N|S)=0.2, P(P|S)=0.8 We need probabilities: P(P), P(N), P(S|P), P(S|N), P(W|P), P(W|N) Priors Conditional Joint Posterior P(S)=0.3 P(P|S)=0.8 P(P and S)=0.24 P(S|P)=0.774 P(W)=0.7 P(P|W)=0.1 P(P and W)=0.07 P(W|P)=0.226 P(P)=0.31 Priors Conditional Joint Posterior P(S)=0.3 P(N|S)=0.2 P(N and S)=0.06 P(S|N)=0.087 P(W)=0.7 P(N|W)=0.9 P(N and W)=0.63 P(W|N)=0.913 P(N)=0.69 0.226 Payoff Weak -8 Introduce 12.124 0.774 0.31 Strong Positive 18 1 12.124 Not Introduce 0 0.913 3.75844 Weak -8 Introduce -8 -8 -5.738 0.087 0.69 Strong Negative 18 2 18 18 0 Not Introduce 0
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Homework 3 Decision Analysis Solutions - Homework 3...

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