The expected opportunity loss of the best decision alternative is the
A) expected monetary value.
B) payoff.
C) expected value of perfect information.
D) None of these alternatives is correct.

Question

Quizplus · Accepted Answer

The expected value of perfect information (EVPI) is the maximum amount a decision maker should pay for perfect information before making a decision. It represents the difference between the expected payoff with perfect information and the expected payoff without perfect information. The best decision alternative is to select the option with the highest expected value of perfect information, as it represents the maximum potential benefit that can be achieved with additional information.

The Expected Opportunity Loss of the Best Decision Alternative Is