BU283 Lecture Notes - Lecture 18: Decision Analysis, Conditional Probability, Expected Value Of Perfect Information
Document Summary
Look over the stats pdf under class 3 reviewed conditional probability and. We went over that before any of the decision analysis stuff. Diana"s father, jerry owns the simpson oil company. His company routinely seeks new sites for oil drilling. He thinks there is a 60% chance there is oil at a particular site. If oil is found, a profit of ,000 is realized. If the site is dry, a loss of ,000 is incurred. When jerry is talking to diana about this, his son-in-law kyle tells him that he knows a really good geological survey company who can help him predict better whether there is oil or not. Jerry needs to decide whether to use this geological survey company or not. The survey may provide strong evidence that there is oil (favorable) or strong evidence that the site is dry (unfavorable).
