7. Consider the two capacity options for Arktec Manufacturing shown below. Suppose the company has identified the following three possible demand scenarios. 2 Click the icon to view the capacity options table. 3 Click the icon to view the demand scenarios table a. The expected cost for Option 1 is $ (Enter your response as a whole number.) The expected cost for Option 2 is S (Enter your response a whole number.) Based on the given information, the best choice is (1) b. Suppose the lowest and highest demand levels are updated to 40,000 and 110,000, respectively. The expected cost for Option 1 is now $ (Enter your response as a whole number.) The expected cost for Option 2 is now $ (Enter your response as a whole number.) Based on the new information, the best choice is (2) c. Draw the decision tree for Arktec Manufacturing (using the initial information used in part a). When drawing your tree, assume that managers must select a capacity option before they know what the demand level will actually be. Choose the correct decision tree below. OA. . a Capacity Option Decision Demand Outcome Capacity Forecast 25,000 Probability 30% Expected Cost $550.000 Demand Outcome Option Decision Forecast 25.000 Probability 30% Expected Cost $550,000 60,000 40% $620,000 60.000 40% $620,000 100,000 30% $700,000 100.000 30% $700,000 Option 2 Option 2 25,000 30% $350.000 25,000 30% $350,000 Option 1 Option 1 60,000 40% $700.000 60.000 40% $700,000 100,000 30% $1,100,000 100,000 30% $1,100,000 O c. OD Q Capacity Option Decision Demand Outcome Probability Forecast Expected Cost $550,000 Demand Outcome Forecast 25,000 Capacity Option Decision Probability 30% Expected Cost $550,000 30% 25.000 ........ 60.000 40% $620,000 60,000 40% $620,000 100,000 30% $700,000 100,000 30% $350,000 Option 1 Option 1 25.000 30% $350,000 25.000 30% $700.000 Option 2 Option 2 60,000 40% $700.000 60.000 40% $700.000 100.000 30% $1,100,000 100,000 30% $1,100,000 2: More Info Fixed cost (per year) $500,000 $100,000 Variable cost (per unit) $2 $10 Option 1 Option 2 3: More Info Probability Demand (units per year) 25,000 60,000 100,000 30% 40% 30% (1) O Option 1 O Option 2 (2) O Option 1 O Option 2