DSCI 304 Chapter Notes - Chapter 4S-5S: Expected Value Of Perfect Information, Emv, Operations Management
11 Sep 2016
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Document Summary
Chaps 4 and 5 supplements key terms operations management. Availability: the fraction of time a piece of equipment is expected to be available for operation. Independent events: events whose occurrences or nonoccurrence doesn t influence each other. Mean time between failures (mtbf): the average length of time between failures of a product or component. Redundancy: the use of backup components to increase reliability. Reliability: the ability of a product, part or system to perform its intended function under a prescribed set of conditions. Bounded rationality: the limitations on decision making caused by costs, human ablates, time , tech and availability of info. Certainty: environment in which relevant parameters have known values. Decision tree: a schematic representation of available alternatives and their possible consequences. Expected monetary value (emv) criterion: the best expected value among the alternatives. Expected value of perfect info (evpi): the difference between the expected payoff with perfect info and the expected payoff under risk.
