31.
Expected Value of Perfect Information (EVPI)
Example 6.2 (Using the second method)
Using the table of regrets in Example 3.4, we can
compute the expected regret for each alternative.
Thus:
Small Facility
.30(0) + .50(2) + .20(6) = 2.2
Medium Facility .30(3) + .50(0) + .20(4) = 1.7
Large Facility
.30(14)+.50(10)+.20(0) = 9.2
The lowest expected regret is 1.7.
Therefore, EVPI = 1.7.
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