Excel, Decision Analysis with additional Info

# Excel, Decision Analysis with additional Info - Conditional...

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Purchase Alternatives 0.6 0.4 Apartment Building \$50,000 \$30,000 Office Building \$100,000 -\$40,000 Warehouse \$30,000 \$10,000 EVPI= \$28,000 Good Economic Conditions Poor Economic Conditions

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EMV \$42,000 \$44,000 \$22,000
Revised Probability when a Positive Report is G States of Nature Good Conditions 0.6 0.8 Poor Conditions 0.4 0.1 P(P): Revised Probability when a Negative Report is States of Nature Good Conditions 0.6 0.2 Poor Conditions 0.4 0.9 P(N): Prior Probabilities Conditional Probabilities Prior Probabilities Conditional Probabilities

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Given 0.48 0.923 0.04 0.077 0.52 Given 0.12 0.250 0.36 0.750 0.48 Prior x Conditional Revised (Posterior Probabilities) Prior x

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Unformatted text preview: Conditional Revised (Posterior Probabilities) Decision Node Probability Node Payout \$89,231 P(P) 0.52 EV with Consultant's Info \$63,200 P(N) 0.48 \$35,000 EVSI: \$19,200 Efficiency: 0.69 P(g|P) \$50,000 Apt. Building \$48,462 0.92 P(p|P) 0.08 \$30,000 P(g|P) \$100,000 Office Building \$89,231 0.92 P(p|P) 0.08-\$40,000 P(g|P) \$30,000 Warehouse \$28,462 0.92 P(p|P) 0.08 \$10,000 P(g|N) \$50,000 Apt. Building \$35,000 0.25 P(p|N) 0.75 \$30,000 P(g|N) \$100,000 Office Building-\$5,000 0.25 P(p|N) 0.75-\$40,000 P(g|N) \$30,000 Warehouse \$15,000 0.25 P(p|N) 0.75 \$10,000...
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## This note was uploaded on 09/24/2010 for the course BU 628 taught by Professor Dr.tapp during the Spring '10 term at Georgian.

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Excel, Decision Analysis with additional Info - Conditional...

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