Managerial Economics and Globalization

Managerial Economics and Globalization

Type I and II Decision Error Cost- 1.25PAGE

The HR department is trying to fill a vacant position for a job with a small talent pool. Valid applicationsarrive every week or so, and the applicants all seem to bring different levels of expertise. For eachapplicant, the HR manager gathers information by trying to verify various claims on resumes, but some doubt about fit always lingers when a decision to hire or not is to be made.

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In the process of attracting a small talent, the human resources management department receives an array of resumes typically. The organization gets applicants who possess broad and varied levels of expertise. However, in the process of hiring, there are high probabilities of making two errors, that is, type I or type II. When an organization makes any of these errors, it may have adverse consequences for the organization. Type I error is created when a null hypothesis is correct, and then it’s rejected (Bill, 2013). In this case, type I error occurs when the human resource managers refuse an applicant who was…

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Managerial Economics and Globalization

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