Based on the EV analysis the most profitable option is to continue to offer the existing drug with modifications in both favorable and unfavorable markets.
- Based on the EV analysis the most profitable option is to continue to offer the existing drug with modifications in both favorable and unfavorable markets.
| Calculate the Expected Value of each node. | ||
| 1- New Drug | ||
| Payoff | Probability | |
| Favorable | $2,686.45 | 69% |
| Unfavorable | $880.75 | 31% |
| Calculation for Expected Value (EV) | ||
| Probabillity | $2,126.68 | |
| 2 – Exisiting Drug | ||
| Payoff | Probability | |
| Favorable | $4,294.29 | 61% |
| Unfavorable | $1,471.47 | 39% |
| Calculation for Expected Value (EV) | ||
| $3,193.39 | ||
| 3 – Make No Changes | ||
| Payoff | Probability | |
| Favorable | $571.59 | 77% |
| Unfavorable | $224.46 | 23% |
| Calculation for Expected Value (EV) | ||
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