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What Is Smart Decision?

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2 comments

  • Kono

    Noticed this page was just updated. In your example, you get 0.15 as toc. Do you use this to compare to expected loss to determine the winner? The calculation is quite different from the previous version. If I don't remember wrong, the previous version calculate toc = 0.1*0.2*0.075 = 0.0015 instead 0.15.

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  • Vaibhav Singh

    Hi Kono,

    Here, by Current Conversion, we mean the Current Conversion Rate. In the example above, we have considered the current conversion rate as 10%. As per the formula of TOC, the calculation would be:
    10 * Expected lift in conversion * multiplier 

    Likewise, when we talk about Current Conversion number and not the Rate, it is 10% or 10/100. So, the calculation of TOC in this scenario would be:
    10/100 * Expected lift in conversion * multiplier * 100

    This is the reason as to why you are seeing the difference in calculation. Now, we have updated the content of this article.

    Thanks,
    Vaibhav.

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