Hudson Corporation is considering three options for managing its data warehouse: 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:

Demand

Staffing Options High Medium Low

Own staff $650450300$

Outside vendor $800600350$

Combination $700600400$

$($a$)$ If the demand probabilities are $0\mathrm{.}35,0\mathrm{.}25,$ and $0\mathrm{.}4,$ which decision alternative will minimize the expected cost of the data warehouse?

$-$ Select your answer $-$

What is the expected annual cost associated with that recommendation? Enter your answer in thousands dollars. For example, an answer of $$200$ thousands should be entered as $200,000.$

Expected annual cost $=$ $

$($b$)$ Construct a risk profile for the optimal decision in part $($a$).$

The input in the box below will not be graded, but may be reviewed and considered by your instructor.

What is the probability of the cost exceeding $$500,000?$

If required, round your answer to two decimal places.

Probability $=$