2. (20 points) A transmission repair facility is experiencing a substantial backlog. The firm is considering three alternative courses of action: A: arrange for subcontracting, B: begin overtime production, or C: construct a new transmission repair facility. The best choice depends largely on future demand which has been categorized as either low, medium, or high. The likelihood associated with these future demand states has been quantified as: low @10%, medium @50%, and high @40%. A cost analysis has identified the following payoff table: Alternatives A B States of Nature for the Production Forecast Low (10%) Medium (50%) High (40%) 10,000 50,000 50,000 -20,000 60,000 100,000 -150,000 20,000 200,000 (a) (8 points) Draw a decision tree for this payoff table using the alternatives at the stated uncertainties. (b) (8 points) Which alternative will you choose? (c) (4 points) Assuming that the likelihood values are NOT known for the states of future demand, what course of action would be taken using the criterion of: Maximax: Maximin