SCENARIO 20-1
The following payoff table shows profits associated with a set of 3 alternatives under 2 possible states of nature.

-Referring to Scenario 20-1,if the probability of S1 is 0.5,then the EVPI for the payoff table is
A)- 3
B)3
C)8
D)11

Question

SCENARIO 20-1
The following payoff table shows profits associated with a set of 3 alternatives under 2 possible states of nature.

-Referring to Scenario 20-1,if the probability of S1 is 0.5,then the EVPI for the payoff table is
A)- 3 
B)3 
C)8 
D)11

Quizplus · Accepted Answer

The Expected Value of Perfect Information (EVPI) is calculated as the difference between the expected value with perfect information and the expected value without it. Given the probability of S1 is 0.5, the EVPI is calculated to be 3.

SCENARIO 20-1 The Following Payoff Table Shows Profits Associated with a Set