3 ms·
Does the difference in expected value (from preventing rare, expensive issues) actually exceed the cost of adding preventative maintenance? It is not obvious th
by dooglius 7y ago
Does the difference in expected value (from preventing rare, expensive issues) actually exceed the cost of adding preventative maintenance? It is not obvious that this is the case.
- kristianp 7y agoThat's why it's not done. However that means something disastrous happens every few years. On average the company is better off, the increased profit in good years outweighs the losses in the possible bad year. It's where black swan theory comes in. How do you calculate the probability of a rare event?