Joyce is the director of manufacturing for Titan Industries, which is considering building a new facility in the Midwest. The demand for the product manufactured in the facility will be either strong or weak. The following decision table summarizes Joyce€™s options and the associated payoffs in millions of dollars.

Joyce can hire a market research firm to conduct a survey to better ascertain the demand for this product. The cost of the survey is $ 20,000. Joyce estimates there is a 62% chance that the survey will predict a strong demand and a 38% chance that the survey will predict a weak demand. If the results of the survey predict a strong demand, the probability of strong demand is 77%. If the results of the survey predict a weak demand, the probability of strong demand is 32%.
a. Choose the best course of action for Joyce under these conditions.
b. What is the most that Joyce should pay for the survey?

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Demand Option Build large faciliy $I Build small facility Don't build facility Strong $1.3 $0.8 $0 Weak -$0.2 $0