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Business, 28.10.2020 07:50 hahHcjckk

Suppose that hiring an employee who is a bad fit for the company results in an error cost of $400, but failing to hire a good employee results in an error cost of $400 to the company. Although it is impossible to tell in advance whether an employee is a good fit, assume that the probability that an applicant is a “good fit” is 0.2, while the probability that an applicant is a “bad fit” is 1−0.2=0.8 . Hiring an applicant who is a good fit, as well as not hiring an applicant who is a bad fit, results in no error cost to the company.

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