Question

Hi, please only respond if you can answer all parts so that I do not waste a question and have to post it again, as many only get one response. Thanks for the help!

The expected value of perfect information (EVPI) is equal to the ________.

Group of answer choices

Expected Monetary Value (EMV) with perfect information minus the EMV without any information

EMV with perfect information divided by the EMV without any information

sum of the EMV with information and the EMV without any information

EMV without any information minus the EMV with perfect information

As an aid to the establishment of personnel requirements, the director of a hospital wishes to estimate the mean number of people who are admitted to the emergency room during a 24-hour period. The director randomly selects 64 different 24-hour periods and determines the number of admissions for each. For this sample, X = 396 and S = 100. Estimate the mean number of admissions per 24-hour period with a 95% confidence interval.

Group of answer choices

a.396 ± 21.553

b.396 ± 26.783

c.396 ± 24.9793

d.396 ± 30.277

Answer 1

1. A. EMV with perfect information - EMV without any information
2. C. 396 ±24.9793

Explanation:

You want the definition of EVPI, and the 95% confidence interval for a sample of 64 with µX = 396 and S=100.

1. EVPI

The expected value of perfect information will be the difference in values with perfect information and without any information:

EVPI = EMV|(perfect information) - EMV|(no information) . . . choice A

2. 95% confidence

The 95% confidence interval is ...

µX ± 1.99834·S/√n

396 ± 1.99834(100/√64) = 396 ± 24.9793

The mean number of admissions is about 396 ± 24.9793.

__

Additional comment

The multiplier of S/√n is the upper (1 -0.95)/2 critical value for the t-distribution with n-1 degrees of freedom. This value is used because the population standard deviation is presumed to be unknown.

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