TABLE 17-5 $$\text { The following payoff table showsprofits associated witha set of } 2 \text { alternatives under } 3 \text { possible events. }$$

question 92

Short Answer

TABLE 17-5
$$\text { The following payoff table showsprofits associated witha set of } 2 \text { alternatives under } 3 \text { possible events. }$$ $\quad$ $\quad$ $\quad$ $\quad$ $\text {Action }$
$\begin{array} { c c c } \text { Event } & A & B \\1 & 1000 & 1200 \\2 &500 & 700\\3&300&-200\end{array}$
Suppose that the probability of Event 1 is 0.2, Event 2 is 0.5, and Event 3 is 0.3.
-Referring to Table 17-5, what is the EVPI for this problem?

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Definitions:

Porter's Model

Also known as Porter’s Five Forces analysis, it is a framework for analyzing a company's competitive environment and identifying the forces affecting profitability.

Long-term Earnings Growth

The increase in an organization's earnings over a substantial period, indicating healthy financial growth and potential for future investments.

Strategy/Environment Fit

The alignment or congruence between an organization's strategy and its external environment to optimize performance.

Cost Focus Strategy

A business approach aimed at being the lowest cost provider in a specific niche or segment.