The expected value of perfect information (EVPI) is always the same as the expected opportunity loss for the best alternative. That is, EVPI = EOL*.

Question

Quizplus · Accepted Answer

This statement is true. The expected value of perfect information (EVPI) represents the difference between the expected value of a decision with perfect information (EVwPI) and the expected value of a decision with uncertain information (EVwoPI). Therefore, if we have perfect information, we can make the best decision possible and eliminate the possibility of an opportunity loss. Consequently, the EVPI is equivalent to the expected opportunity loss for the best alternative.

The Expected Value of Perfect Information (EVPI) Is Always the Same