DataWarehouseOperation.KangCorporationisconsideringthreeoptionsfor managing its data processing operation: continuing with its own staff, hiring an outside vendor to do the managing $($referred to as outsourcing$),$ or using a combination of its own staff and an outside vendor. The cost of the operation depends on future demand. The annual cost of each option $($in thousands of dollars$)$ depends on demand as follows. LO $1,3$

a$.$ If the demand probabilities are $0\mathrm{.}2,0\mathrm{.}5,$ and $0\mathrm{.}3,$ which decision alternative will minimize the expected cost of the data processing operation? What is the expected annual cost associated with that recommendation?

b$.$ Construct a risk profile for the optimal decision in part $($a$).$ What is the probability of the cost exceeding $$700,000?$