Q38.

Kelly Construction
Low
Build 100
Build 200
Build 300
max (Expected Return w/Perfect Info

$500
$0
($700)
$500

Prior Probabilities

0.3

RELIABILITIES
Weak (M1)
Moderate (M2)
Strong (M3)

Low

Joint & Marginal Probabilities
Weak (M1)
Moderate (M2)
Strong (M3)

Low

Posterior Probabilities
Weak (M1)
Moderate (M2)
Strong (M3)

Low

Expected Return w/Perfect Info (EVPI)
EVPI
Expected Return w/Sample Info (EVSI)
EVSI

Medium
High
Expected Return
$500
$500
$500
$1,000
$1,000
$700
$400
$1,500
$290
$1,000
$1,500
$950
0.5
Medium

0.7
0.2
0.1

High
0.3
0.4
0.3

Medium
0.21
0.06
0.03
0.30

0.553
0.188
0.100

0.2

0.1
0.3
0.6
High

0.15
0.20
0.15
0.50
Medium
High
0.395
0.625
0.500

0.02
0.06
0.12
0.20

0.380
0.320
0.300
1.000

0.053
0.188
0.400

1.000
1.000
1.000

$950
$250
$720
$20

Q38. Kelly Construction
Build 100
Build 200
Build 300
max (Expected Return w/Perfect Info

Low
500
0
-700
=MAX(B3:B5)

Medium
500
1000
400
=MAX(C3:C5)

High
500
1000
1500
=MAX(D3:D5)

Prior Probabilities

0.3

0.5

0.2

RELIABILITIES
Weak (M1)
Moderate (M2)
Strong (M3)

Low
0.7
0.2
0.1

Medium
0.3
0.4
0.3

High
0.1
0.3
0.6

Joint & Marginal Probabilities
Weak (M1)
Moderate (M2)
Strong (M3)

Low
=B11*B$8
=B12*B$8
=B13*B$8
=SUM(B16:B18)

Medium
=C11*C$8
=C12*C$8
=C13*C$8
=SUM(C16:C18)

High
=D11*D$8
=D12*D$8
=D13*D$8
=SUM(D16:D18)

=SUM(B16:D16)
=SUM(B17:D17)
=SUM(B18:D18)
=SUM(B19:D19)

Posterior Probabilities
Weak (M1)
Moderate (M2)
Strong (M3)

Low
=B16/$E16
=B17/$E17
=B18/$E18

Medium
=C16/$E16
=C17/$E17
=C18/$E18

High
=D16/$E16
=D17/$E17
=D18/$E18

=SUM(B22:D22)
=SUM(B23:D23)
=SUM(B24:D24)

Expected Return w/Perfect Info (EVPI)
EVPI
Expected Return w/Sample Info (EVSI)
EVSI

=SUMPRODUCT(B3:D3,B$8:D$8)
=SUMPRODUCT(B4:D4,B$8:D$8)
=SUMPRODUCT(B5:D5,B$8:D$8)
=SUMPRODUCT(B6:D6,B$8:D$8)

=E6
=E6-MAX(E3:E5)
=K80
=E31-E4

0.553
Low
$500
$500

$500

0.395
Medium

Build 100

$500
0

500

$500

$500

0.053
High
$500
$500

$500

0.553
Low
$0
$0
0.380
Weak (M1)

$0

0.395
Medium

Build 200
1

0

$1,000

500.00

0

447.37

$1,000

$1,000

0.053
High
$1,000
$1,000

$1,000

0.553
Low
($700)
($700)

($700)

0.395
Medium

Build 300

$400
0

-150

$400

$400

0.053
High
$1,500
$1,500

$1,500

0.188
Low
$500
$500

$500

0.625
Medium

Build 100

$500
0

500

$500

$500

0.188
High
$500
$500

$500

0.188
Low
$0
$0
0.320
Moderate (M2)

Survey

$0

0.625
Medium

Build 200
2

$0

720.00

0

812.5

$1,000
0

812.5

$1,000

$1,000

0.188
High
$1,000
$1,000

$1,000

0.188
Low
($700)
($700)

($700)

0.625
Medium

Build 300

$400
0

400

$400

$400

0.188
High
$1,500
$1,500

$1,500

0.100
Low
$500
$500

$500

0.500
Medium

Build 100

$500
0

500

$500

$500

0.400
High
$500
$500

$500

0.100
Low
$0
$0
0.300
Strong (M3)

0.500
Medium

Build 200

1
720

$0

2
0

$1,000

900.00

0

900.00

$1,000

$1,000

0.400
High
$1,000
$1,000

$1,000

0.100
Low
($700)
($700)

($700)

0.500
Medium

Build 300

$400
0

730

$400

$400

0.400
High
$1,500
$1,500

$1,500

0.300
Low
$500
$500

$500

0.500
Medium

Build 100

$500
0

500

$500

$500

0.200
High
$500
$500

$500

0.300
Low
$0
$0

No Survey

$0

0.500
Medium

Build 200
2

0

700

$1,000
0

700

$1,000

$1,000

0.200
High
$1,000
$1,000

$1,000

0.300
Low
($700)
($700)

($700)

0.500
Medium

Build 300

$400
0

290

$400

$400

0.200
High
$1,500
$1,500

$1,500

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