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Business Case Analysis with R: Simulation Tutorials to Support Complex Business Decisions by Robert D. Brown III

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© Robert D. Brown III 2018
Robert D. Brown IIIBusiness Case Analysis with Rhttps://doi.org/10.1007/978-1-4842-3495-2_15

15. Building the Simulation in R

Robert D. Brown III
(1)
Cumming, Georgia, USA
 
As for the solution approach, you want to calculate the VOI for the problem displayed in our last influence diagram. To do so, we take the following algorithm approach.
  1. 1.
    Run the simulation for both decision strategies (or more as indicated) and calculate the mean NPV and NPV cumulative probability distributions. If one of the cumulative probability distributions does not exhibit strict dominance, then we know that sensitivity analysis might be helpful for identifying critical uncertainties.
     
  2. 2.
    Test the sensitivity of the mean NPV of each decision to ...

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