Interactive model · decision analysis
🎲 Decision Lab: How Big Should Morley Build?
A developer must choose a small, medium or large project before knowing whether demand will be low, medium or high. Move the demand probabilities and watch every decision rule react. Then see what a market forecast is worth, and how a cautious owner chooses differently.
Payoffs in $1,000s. Default probabilities, EMVs ($434.75K for Medium), the forecast's value (EVSI $120.25K) and the utility result (Small) all match the original workbook.
Expected value of each option
EMV = probability-weighted average payoff
What each decision rule recommends
EMV as high demand becomes more likely
Low and medium keep their relative weight · dashed line = current setting