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Journal of Dairy Science Vol. 74 No. 3 902-910
© 1991 by American Dairy Science Association ®
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Application of Type I and II Errors in Dairy Farm Management Decision Making

David T. Galligan 1, William Chalupa 1, and Charles F. Ramberg Jr. 1

1 Department of Clinical Studies, School of Veterinary Medicine, University of Pennsylvania, Kennett Square 19348

The economic costs of type I and type II errors associated with decisions regarding the use of sodium bicarbonate and bST on dairy farms were calculated. Data from published experiments were used to estimate the mean and SD in production responses and associated changes in DM intake. The frequency distribution of the production response and the expected monetary value of type I error (using a product when it is unprofitable) and type II error (not using a product when it is profitable) were calculated. Supplemental sodium bicarbonate ($.05/cow per d) and bST ($.40/cow per d) were used as sample decision problems. Milk was valued at $.28/kg, and feed was priced at $.15/ kg. Based on 12 reports, cows supplemented with .75% sodium bicarbonate in ration DM produced an additional 1.43 kg/d of 3.5% FCM (SD = 1.13) and consumed .36 kg/d more feed. Type I error costs were $.02/d, whereas type 11 error costs were $.32/d. From 16 reports, cows supplemented daily with 10 to 15 mg/d of bST produced an additional 3.9 kg/d of 3.5% FCM (SD = 2.1) and consumed .6 kg/d more feed. Type I error costs were $.03/d, whereas type II error costs were $.66/d. Because type II error costs were greater than type I error costs, the economic decision favored the use of sodium bicarbonate or bST or both. Type II error cost was greater than type I for both products when DM cost was varied from $.064 to .239/kg and milk price was varied from $.145 to $.429/kg.

Key Words: decision analysis • bovine somatotropin • sodium bicarbonate

Submitted on March 5, 1990
Accepted on October 9, 1990




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Copyright © 1991 by the American Dairy Science Association ®.