Linear Prog COP4355_Part_45

Linear Prog COP4355_Part_45 - EVSI 2 = $80 - $75.20 = $4.80...

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184 Chapter 15 Decision Analysis 15.16 (continued) (e) If the prediction is “Good,” rent; if it is “Bad,” sell. (f) EVSI = $1,230 - $1,100 = $130 or: EVSI = $300 - $170 = $130. (g) Efficiency = EVSI $130 = = 43.3% EVPI $300 32 8 40 18 42 60 50 60 100 Actually Good Actually Bad Prediction Good Bad Given: P(PG/G) = .8 P(PB/B) = .7 32 Revised:P(G/PG) = = .64 50 18 P(B/PG) = = .36 50 8 P(G/PB) = = .16 50 42 P(B/PB) = = .84 50
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Solutions Manual and Workbook 185 SAMPLE SIZE DETERMINATION 15.17
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186 Chapter 15 Decision Analysis 15.17 (continued) (a) Accept (b) $80 (c) EVSI 1 = $80 - $80 = 0
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Unformatted text preview: EVSI 2 = $80 - $75.20 = $4.80 EVSI 3 = $80 - $74.56 = $5.44 Solutions Manual and Workbook 187 15.17 (continued) (d) Optimal sample size is n = 2. ENGS = $4.80 - $4.00 = $.80 For larger sample sizes, the cost of sampling is greater than the cost saving. (e) $4.80/$80 = .06 Note that a sample of n = 1 does not change our optimal act. The expected profit is $80. 15.18 Maximax Large; Maximin Small; Hurwicz ( = 0.4) Large;Savage Medium; LaPlace Medium. EV 70, Medium....
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Linear Prog COP4355_Part_45 - EVSI 2 = $80 - $75.20 = $4.80...

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