Decision Analysis. A company is deciding whether to introduce a new product or not. Should it choose to launch it, it can either subcontract it or manufacture it itself. Based from previous products, the response of the market could either be poor, moderate or strong. The expected payoffs for each course of action under the three scenarios are presented below.

	Poor Market	Moderate	Strong Market
Do nothing	0	0	0
Sub contract	-30	80	80
Manufacture	-50	50	120

Which course of action seems best for each of the below-listed criteria for decision-making. List the relevant pay-offs and encircle the best option under each criterion.

CRITERIA	Do nothing	Sub-contract	Manufacture	Best Value
Maximax
Maximin
Minimax
Equally likely
EMV*

* Assume a probability of 0.4 for poor market, 0.4 for moderate, and 0.2 for strong market

What is the expected payoff if we have perfect information?

What is the value of perfect information?