What Is the Correct Equation for Computing the Expected Value

question 41

Multiple Choice

What is the correct equation for computing the expected value of perfect information (EVPI) ?

• A)EVPI = expected value under risk for best alternative - expected value under certainty.
• B)EVPI = expected value under certainty - expected value under risk for best alternative.
• C)EVPI = expected value with sample information - expected value without sample information.
• D)EVPI = expected value without sample information - expected value with sample information.
• E)none of the above

---

Definitions:

Waiting Lines

Queues that form when the demand for a service exceeds the provider's capacity, analyzed to improve service efficiency and customer satisfaction.

Service Cost

The total expense of providing a service, encompassing labor, materials, and overheads necessary to deliver the service to customers.

Customers' Waiting

The period that customers spend in a queue or delay before receiving a product, service, or response from a business.

Waiting Line

A queue of people or items waiting to be served or processed, common in service areas and manufacturing.