EOL will always result in the same decision as the maximum EMV with revenue data, but will pick the worst alternative with cost data.

Question

Quizplus · Accepted Answer

EOL (Expected Opportunity Loss) and EMV (Expected Monetary Value) are decision-making criteria that can lead to different decisions. EOL focuses on minimizing the potential loss from not choosing the best alternative, while EMV aims to maximize expected gains. The statement that EOL always results in the same decision as EMV with revenue data but picks the worst alternative with cost data is incorrect because both criteria aim to optimize outcomes, though they approach the decision-making process from different perspectives.

EOL Will Always Result in the Same Decision as the Maximum