Question: 1 2 . 2 9 A machine shop specializing in industrial pumps is experiencing a substantial backlog, and the shop's management is considering three courses

12.29 A machine shop specializing in industrial pumps is experiencing a substantial backlog, and the shop's management is considering three courses of action:Arrange for subcontracting (A)Construct new facilities (B)Do nothing (C)The correct choice depends largely upon demand, which may be low, medium, or high. By consen-sus, management estimates the respective demand probabilities as 0.2,0.5, and 0.3. The management estimates the profits when choosing from the three alternatives (A, B, and C) under the differing probable levels of demand. These profits are already expressed in terms of NPW.

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