PLEASE DRAW THE DECISION TREE.

Smith Company must decide whether to manufacture a new component at its factory or purchase the component from a supplier. In general, if the demand for the product is high enough, it will be more profitable to manufacture the component in-house rather than purchase it. However, the make-or-buy decision must be made before the demand level is known. The projected profits are given in the following payoff table. The following payoff table shows the projected profit: Decision Alternative Expected Profits High Demand Medium Demand Manufacture $200,000 $60,000 Purchase $140,000 $80,000 probability 0.3 0.4 Low Demand -$30,000 $20,000 0.3 Smith can do a market research of the potential demand for the product before making the decision. If the market research is done, it will predict either a favorable market condition (F) or unfavorable market condition (U). The following gives the relevant probabilities. P(F) = 0.40 P( HF) = 0.45 P( HU) = 0.20 P(0) = 0.60 P( MF) = 0.40 P( MU) = 0.40 P( LF) = 0.15 P( LU) = 0.40 Suppose the market research is expected to cost $10,000. Determine the best decision strategy including whether the market research should be conducted. Draw a decision tree