Question
You, an analyst at the Animal Health Agency (AHA), must make a recommendation whether or not to ban imported pigs due to a risk of
You, an analyst at the Animal Health Agency (AHA), must make a recommendation whether or not to ban imported pigs due to a risk of importing a disease, porcine hoof blister (PHB), or to require that imported pigs be tested for the disease.
With no ban, the probability of an outbreak is known with 95% confidence to be in the range of 3.5% 1.5% and the cost of dealing with an outbreak is known with 95% confidence to be in the range of $1,000,000 $500,000 (which will ultimately be paid by the consumer).
With a ban, there will be 0% probability of transmission, but the industry will experience increased costs that are estimated with 95% confidence to be in the range of $30,00 $20,000. (These costs will also be ultimately paid by the consumer.)
You could also require a test that reduces the probability of an outbreak to 0.35% 0.15% (with 95% confidence), but increases costs by $10,000 $1,000 (95% confidence) (plus $1,000,000 $500,000 in the event of an outbreak).
Your agencys goal is to reduce the expected cost to the consumer
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