Question
Given her misgivings about available probability estimates for the three caseload scenarios, the Director of Social Services thinks it would be a good idea to
Given her misgivings about available probability estimates for the three caseload scenarios, the Director of Social Services thinks it would be a good idea to perform a sensitivity analysis on decision sensitivity to probability values. For this, she must reduce the number of caseload scenarios to just two. To err on the side of caution, she wishes to preserve the Very High caseload scenario as a distinct scenario. (a) Perform a Break-Even Analysis (using a Break Even Chart) to determine ranges of probability p(Very High Caseload) values over which each option is the optimal choice. (b) By looking at the Break Even Chart from part (a) (i.e., do not build a second break-even chart), determine over what probability ranges for the alternative scenario to a Very High caseload is each option the optimal choice.
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