Expected Monetary Value (EMV) Decision Analysis
Introduction to Decision Analysis.
The characteristics and properties of the expected monetary value (EMV) criterion are explained through the calculation of the expected value of each decision alternative using probabilities, with a demonstration example.
Note: At 7:38, in the calculation for the 150 alternative, the result would be:
EMV 150 = 750 * 0.2 + 1050 * 0.25 + 1200 * 0.32 + 1350 * 0.23 = 1107.
This calculation does not alter the optimal solution.
This criterion is used in the decision tree video:
• Introducción sencilla a los Arboles de Dec...
and in the payoff matrix model under risk conditions:
• Introducción Sencilla a Matriz de Pagos, T...
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