Hudson Corporation is considering three options for managing its data warehouse: continuing with its own staff, hiring an outside vendor to do the managing, 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 $600600550$

Outside vendor $850550250$

Combination $750600450$

$($a$)$

If the demand probabilities are $0\mathrm{.}2,0\mathrm{.}5,$ and $0\mathrm{.}3,$ for high, medium and low demand respectively, which decision alternative will minimize the expected cost of the data warehouse? What is the expected annual cost associated with that recommendation? $($Enter your answers in dollars.$)$

EV$($Own staff$)=$$

$EV($Outside vendor$)=$$

$EV($ Combination$)=$$

The decision alternative that minimizes the expected cost is

$].$

The expected annual cost associated with this recommendation is $

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

What is the probability of the cost exceeding $$750,000?$