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Suppose that hiring an employee who is a bad fit for the company results in an error cost of $200, but failing to hire a
Suppose that hiring an employee who is a bad fit for the company results in an error cost of $200, but failing to hire a good employee results in an error cost of $300 to the company. Although it is impossible to tell in advance whether an employee is a good fit, assume that the probability that an applicant is a "good fit" is 0.65, while the probability that an applicant is a "bad fit" is 10.65=0.3510.65=0.35. Hiring an applicant who is a good fit, as well as not hiring an applicant who is a bad fit, results in no error cost to the company.
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