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Check My Work (2 remaining) E. Spreadsheet Edwards Machine Tools needs to purchase a new machine. The basic model is slower but costs less, whereas the advanced model is faster but costs more. Profitability will depend on future demand. The following table presents an estimate of profits over the next three years. Demand Volume Decision Low Medium High Basic model $65,000 $35,000 $130,000 $90,000 $145,000 $190,000 Advanced model Fill in the table below for maximum and minimum profit payoffs under each model. Round your answers to the nearest dollar. Decision alternative Maximum Minimum Basic model $ $ Advanced model Calculate the amounts foregone by not adopting the optimal course of action for each possible demand level. Determine the maximum opportunity cost for each model. Fill in the table below. If your answer is zero, enter "O". Round your answers to the nearest dollar. Future events Opportunity Loss Matrix Decision alternative Low Medium High Maximum Basic model $ Advanced model $ Given the uncertainty associated with the demand volume, and no other information to work with, what decision would you make? The aggressive strategy (maximax) is to choose the -Select- The conservative strategy (maximin) is to choose the -Select- The opportunity loss strategy is to choose the -Select- Formatting as Table J K L B7 * v fx Low Product Demand A B C D E F G . I 1 Decision Analysis Cengage Learning 2 Enter the data only in the yellow cells. Not for commercial use. 3 This template is designed to allow up to 5 decision alternatives and future events. 4 Enter names of decision alternatives and future events in the appropriate cells in column A or k and row 7. Probabilities are optional. 5 6 Payoff Table Future Events 7 Decision Alternative Low Product Demand lHigh Product Demand Maximum Minimum Expected Value 8 Expand existing plant $200,000.00 $300,000.00 $300,000.00 $200,000.00 9 Build new plant $100,000.00 $450,000.00 $450,000.00 $100,000.00 10 11 12 13 Probability Maximum Expected Value $0.00 14 15 Opportunity Loss Matrix Future Events 16 Decision Alternative Low Product Demand High Product Demand Maximum 17 Expand existing plant $0.00 $150,000.00 $150,000.00 $ 18 Build new plant $100,000.00 $0.00 $100,000.00 19 20 21 22 23 Maximax Decision Build new plant 24 Maximin Decision Expand existing plant 25 Opportunity Loss Decision Build new plant 26 Expected Value Decision #N/A 27 EVPI #N/A 28 29 30 31 32 33 34 35 36 37