MKTG 317 Lecture Notes - Lecture 4: Poisson Point Process, Customer Satisfaction, Memorylessness
11 Oct 2017
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Sumproduct in excel: ev of pi = ev with pi emv; ev with pi = highest1*p1 + highest2*p2. Contingent decisions: require test or analysis to be done then a wait for the results which would give a better indivation of the results of the next decision. Evsi: expected value of sample information: the maximum amount willing to pay to obtain sample information. Prior probabilities new information appli(cid:272)atio(cid:374) of (cid:271)aye"s theo(cid:396)e(cid:373) posterior probabilities. P[a|b] = probability that event a occurs given that event b is known to occur. P[b|a] = p[a|b] p[b] / p[a]; where p[a] = p[b] p[a|b] (prob a & b occur) + p[not b] p [a|notb] (prob a and not b occur) 3 major flaws biased, underlying variability, little value when recommending to top management. Simulation: random variables are generated, assigned n non biased way, user does not have to determine them, gives more than one value for output.
