B.F. Retread, a tire manufacturer, wants to select one of three feasible prototype designs for a…

➤ What is the value of perfect information and how do you estimate it?
EVPI equals expected value with perfect information minus EMV of best current choice. To estimate: for each demand state pick the prototype with maximum revenue, compute weighted average using state probabilities, then subtract the highest EMV. EVPI shows the maximum worth of knowing the true market state in advance.