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26and27_Overheads - Objectives for today Review of...

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ACC 333 (Farrell), Fall 2011, Classes 26 & 27 1 ACC 333 (Farrell) Fall 2011, Classes 26 & 27 1 Objectives for today Review of probability basics – Definitions – Types of probabilities Decision trees – What they are and how to draw them – Using them to evaluate decision alternatives – Is gathering additional information worth the cost? Value of perfect and imperfect information Uncertainty & sensitivity analyses ACC 333 (Farrell) Fall 2011, Classes 26 & 27 2 Probability – Definitions Probability – The likelihood (i.e., chance) of occurrence of an event Probability of some event A is denoted P(A) Ranges from 0 through 1 Probability distribution – An exhaustive list of all events that can result from a chance process and the probability associated with each of those events For example, what’s the probability distribution for the roll of a die?
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