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Business Statistics, 3rd Edition
book

Business Statistics, 3rd Edition

by Naval Bajpai
April 2024
Intermediate to advanced content levelIntermediate to advanced
921 pages
37h 16m
English
Pearson India
Content preview from Business Statistics, 3rd Edition
Chapter 19
PB
Statistical Decision Theory
823
19.4.2 Expected Opportunity Loss (EOL)
Expected opportunity loss (EOL) criterion is another approach based on which a decision can be
taken. From Table 19.15, the expected opportunity loss (EOL) can be computed as below:
EOL
()
Sijj
j
k
i
lp=
=
1
where k is the number of possible state of nature, r the number of possible acts, l
ij
the opportunity
loss associated with ith act (S
i
) and jth state of nature (E
j
), and P
j
the probability of occurrence
of the state of nature j.
Example 19.4
Suppose in Example 19.1, the probability of occurrence of various states of nature are also
provided as indicated in Table 19.16. ...
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Publisher Resources

ISBN: 9789390168996