Calculate the expected value of imperfect information


The managers of MEGA Industries wanted to consult BUZZ consultant in order to get advice and they are ready to wait. This delay and fee paid to BUZZ consultant will reduce net contribution to profit by $4.8 million. On other hand BUZZ consultants past history about the prediction of market behavior indicatesthat they are only sixty eight percent accurate when actual market is high, seventy three percent accurate when actual market is moderate and eighty nine percent accurate when actual market is low. When they are not accurate, behavior stated in the following table.e.g P(BUZZ consultant predict about Low market | When actual market is High) = 19% Draw the complete decision tree and calculate the expected value of imperfect information?

 

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Basic Statistics: Calculate the expected value of imperfect information
Reference No:- TGS0110168

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