Question: A Supply Chain manager needs to make a decision on whether to build large or small warehouse. If the manager builds a large warehouse, there

A Supply Chain manager needs to make a decision on whether to build large or small warehouse. If the manager builds a large warehouse, there is a probability of 0.6 for high demand and a probability of 0.4 for low demand. If manager decides to build a small warehouse, there is a probability of 0.6 for high demand while 0.4 for low demand. The payoff for the high demand scenario for a large warehouse is $65.4 and $58.9 for a small warehouse. If the manager decides to build a large warehouse and the low demand scenario occurs, he/ she can reduce prices and that would result in a payoff of $19.0, while a payoff of $-18.0 results if he/she did nothing. If a low demand scenario occurs and manager had decided to go with a smaller warehouse, she/ he can reduce prices and achieve a payoff of $ 29.0 while a payoff of $ -2.0 results if manager did nothing (all payoffs are in 100K). Perform the foldback procedure and advise the manager on which option she/he should take (large or small warehouse)? a 46.94 payoff, Small Warehouse b .46.84 payoff, Large Warehouse 52.00 payoff, Large Warehouse .12 payoffSmall Warehouse

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