Part A and C on Excel

Part B on Excel

Greentrop Pharmaceutical Products is the world leader in the area of sleep aids. Its major product is "Dozealot." The Research-and-Development Division has defined two alternatives to improve the quality of the product. These alternatives are simple reformulations of the product to minimize the side effects and to improve the product efficacy. To conduct an analysis, management has decided to consider the possible demands for the drug under each alternative. The following payoff table shows the projected profit in millions of dollars. Demand Decision Alternatives Low Medium High $500 $350 $525 $875 $300 $765 d2 a. Construct a decision tree for this problem. b. If the decision maker knows nothing about the probabilities of three states of nature, what is the recommended decision using the optimistic, conservative, and minimax regret approaches? C. If the demand probabilities are 0.3, 0.5, and 0.2 for Low, Medium, and High, respectively, what is the best decision using the expected value approach? Demand Decision Alternatives Low Medium High $ 500.00 $ 350.00 $ 525.00 dz $ 875.00 $ 300.00 $ 765.00 Probability 0.3 0.5 0.2 Decision Alternatives Low Demand Medium High 500.00 $ 350.00 $ 525.00 875.00 $ 300.00 $ 765.00 d1 d2 Regret Medium High maximum Regret Optimistic Approach Decision Alternatives Maximum Payoff d1 d2 Decisoin Alternatives Low d1 d2 Conservative Approach Decision Alternatives Minimum Payoff di d2