Asked by Charles Jackson on Jun 09, 2024
Verified
{Car Audio Store Narrative} Use the posterior probabilities for I2 in the previous questions to recalculate the expected monetary value of each act,then determine the optimal act and the EMV*.
Posterior Probabilities
These are the probabilities that are computed after taking into account the relevant evidence or data, particularly in the context of Bayesian inference.
Expected Monetary Value
A calculation used in decision-making that multiplies the potential outcomes by their respective probabilities to get an average outcome value.
Optimal Act
A decision or action that yields the best outcome from all possible alternatives.
- Evaluate the expected monetary value (EMV) by including and omitting extra details.
- Determine the best decision-making actions by evaluating anticipated financial outcomes.
- Make use of decision-making frameworks and theories in assorted business cases, including repair work, vehicle sound stores, and personalized home layouts.
Verified Answer
EMV (a2)= (0.035)(28)+ (0.965)(29)= 28.965
EMV (a3)= (0.035)(33)+ (0.965)(25)= 25.280
The optimal act is a1.Hence,EMV* = 31.580.
Learning Objectives
- Evaluate the expected monetary value (EMV) by including and omitting extra details.
- Determine the best decision-making actions by evaluating anticipated financial outcomes.
- Make use of decision-making frameworks and theories in assorted business cases, including repair work, vehicle sound stores, and personalized home layouts.
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