Using the following table, practice the Expected Monetary Value (EMV), Expected Opportunity Loss (EOL), and Expected Value of Perfect Information (EVPI). Use the .30 for the probability of a Strong Market, .50 for the probability of a Fair Market, and .20 for the probability of a Poor Market. Show your selections (highlight your best alternative). show the work on an excel file. PROFIT ($) STRONG MARKET FAIR MARKET POOR MARKET Large facility 550,000 110,000 -310,000 Medium-sized facility 300,00 129,000 -
5. Using the following table, practice the Expected Monetary Value (EMV), Expected Opportunity Loss (EOL), and Expected Value of Perfect Information (EVPI). Use the .30 for the probability of a Strong Market, .50 for the probability of a Fair Market, and .20 for the probability of a Poor Market. Show your selections (highlight your best alternative). show the work on an excel file.
|
|
PROFIT ($) |
||
|
|
STRONG MARKET |
FAIR MARKET |
POOR MARKET |
|
Large facility |
550,000 |
110,000 |
-310,000 |
|
Medium-sized facility |
300,00 |
129,000 |
-100,000 |
|
Small facility |
200,000 |
100,000 |
-32,000 |
|
No facility |
0 |
0 |
0 |
Probability is a way to occur how likely something is to happen. Many things are difficult to forecast with absolute confidence. Using it, we can only make predictions about the likelihood of an event happening, or how likely it is. Probability can range from 0 to 1, with 0 denoting an impossibility and 1 denoting a certainty.
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