PLE has developed a prototype for a new snow blower for the consumer market. This can exploit the company$$s expertise in small$-$gasoline$-$engine technology and also balance seasonal demand cycles in the North American and European markets to provide additional revenues during the winter months. Initially, PLE faces two possible decisions: introduce the product globally at a cost of $$850,000$ or evaluate it in a North American test market at a cost of $$500,000.$ If PLE introduces the product globally, PLE might find either a high or low response to the product. The probabilities of these events are estimated to be $0\mathrm{.}72$ and $0\mathrm{.}28,$ respectively. With a high response, gross revenues of $$2,000,000$ are expected; with a low response, the figure is $$450,000.$ If PLE starts with a North American test market, it might find a low response or a high response, with probabilities of $0\mathrm{.}3$ and $0\mathrm{.}7,$ respectively. This may or may not reflect the global market potential. In any case, after conducting the marketing research, PLE next needs to decide whether to keep sales only in North America, market globally, or drop the product.

If the North American response is high and PLE stays only in North America, the expected revenue is $$1,200,000.$ If it markets globally $($at an additional cost of $$200,000),$ the probability of a high global response is $0\mathrm{.}82($low global response probability is $0\mathrm{.}18)$ with revenues of $$2,000,000($$$450,000$ if the global response is low$).$

If the North American response is low, and it remains in North America, the expected revenue is $$200,000.$ If PLE markets globally $($at an additional cost of $$600,000),$ the probability of a high global response is $0\mathrm{.}15($low global response probability is $0\mathrm{.}85),$ with revenues of $$2,000,000($$$450,000$ if the global response is low$).$

Ms$.$ Burke has persuaded the PLE executive committee to request your groups input on this matter. Specifically, the executive committee requests that your group construct a decision tree by utilizing analytic solver platform$$s Decision Tree Tool, determine the optimal strategy, and develop a risk profile associated with the optimal strategy. Evaluate the sensitivity of the optimal strategy to changes in the probability estimates by using $$What$-$if$-$Analysis$.$

Please solve it in excel and show calculations and formulas used.