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Supply chain MGT Expected value

Supply chain MGT Expected value

Q How does the EV differ from the real value?

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Expected value is very much different than the concept of real value. Expected value defines what is being expected (the worth) out of an asset, action plan or strategy, whereas, the real value is determined by how a situation is prevailing and what is its value in the market. Expected value is actually the predicted value that is often arrived at through certain probabilistic measure, statistical tool or even other scientific methods including trend analysis, normal distribution and economic condition of the market/ organization or even an industry. Expected value can differ from real value in every aspect and moreover, the difference can be recognized once the real time comes. Often times, it also happens that the method that is being chosen is not suitable for evaluating a particular thing for a particular given surrounding, that finally leads to wrong prediction and a flaw contained expected value. A lot of business ends up falling in this trap. However, if a scientific calculation is carried out, then there can be good amount of chance that the expected value that is being arrived at the end of the analysis is actually accurate and correct estimation of expected value.