Question: For the PDC problem in Section 13.3, the decision alternative to build the large complex was found to be optimal using the expected value approach.

For the PDC problem in Section 13.3, the decision alternative to build the large complex was found to be optimal using the expected value approach. In Section 13.4 we conducted a sensitivity analysis for the payoffs associated with this decision alternative. We found that the large complex remained optimal as long as the payoff for the strong demand was greater than or equal to R17.5 million and as long as the payoff for the weak demand was greater than or equal to R19 million.

a. Consider the medium complex decision. How much could the payoff under strong demand increase and still keep decision alternative d3 the optimal solution?

b. Consider the small complex decision. How much could the payoff under strong demand increase and still keep decision alternative d3 the optimal solution?

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