buad306 exercise7

# buad306 exercise7 - Probability 0.15 0.25 0.45 0.15 With...

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Unformatted text preview: Probability 0.15 0.25 0.45 0.15 With Demand Demand Stock 500,000 1,000,000 2,000,000 5,000,000 Stock 500,000 500,000-\$1,500,000-\$1,500,000-\$1,500,000-\$1,500,000 500,000-\$2,700,000 1,000,000-\$4,000,000 \$2,000,000 \$2,000,000 \$2,000,000 1,000,000-\$5,200,000 2,000,000-\$9,000,000-\$3,000,000 \$9,000,000 \$9,000,000 2,000,000 -\$10,200,000 5,000,000 -\$24,000,000 -\$18,000,000-\$6,000,000 \$30,000,000 5,000,000 -\$25,200,000 Stock Maximax Minimax Equally likely? EMV 500,000-\$1,500,000-\$1,500,000-\$1,500,000-\$1,500,000 1,000,000 \$2,000,000-\$4,000,000 \$500,000 \$1,100,000 2,000,000 \$9,000,000-\$9,000,000 \$1,500,000 \$3,300,000 5,000,000 \$30,000,000 -\$24,000,000-\$4,500,000-\$6,300,000 Decision 5,000,000 500,000 2,000,000 2,000,000 EPPI = Sigma CP* (State i) P (State i)= EPPI \$8,825,000 EVPI = EPPI - EMV EVPI \$5,525,000 Decision Tree Exercise 7 Kevin Shalley This is how much perfect in the maximum amount D=500,000 (.1 D=500,000 (.1 D=1,000,000 ( D=1,000,000 ( D=2,000,000 ( D=2,000,000 ( D=5,000,000 ( D=5,000,000 ( D=500,000(.1 D=500,000(.1 Make 500,000 Make 500,000 D=500,000(.15D=500,000(....
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## This note was uploaded on 10/20/2010 for the course BUAD BUAD306 taught by Professor Kydd during the Spring '07 term at University of Delaware.

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buad306 exercise7 - Probability 0.15 0.25 0.45 0.15 With...

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