APC Industries has been growing and having difficulty meeting the demand for its products recently. So, the firm is considering three options to address this issue: It can move to a larger facility, add a second shift, or hire a subcontractor to produce the company€™s products. The annual payoff of each option depends if the demand continues to expand, holds steady, or declines. The expected payoff for each combination is shown in the following table:

a. Choose the best option for APC Industries using decision making under risk.
b. What is the most that APC Industries would be willing to pay for additional information?

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Demand Holds Expands Steady Declines $350,000 $130,000-$90,000 Move to a larger facility Add a second $275,000 $90,000$40,000 shift Subcontract $190,000 $20,000$20,000 Probability 0.35 0.40 0.25