Question: please use correct values and complete answer with tree QUESTION6. Expected valse Applied to Business Apolkation (26 potets) A Manufacturing Company must make a decision
please use correct values and complete answer with tree
QUESTION6. Expected valse Applied to Business Apolkation (26 potets) A Manufacturing Company must make a decision regarding the level of sales and dedication to a new product There are 2 possible decisions to be evaluated. The potential profit from each decision alternative depends on the market acceptance which may be high, moderate or low. If market acceptance is high, cach of the two decision alteratives, d1 and 22. will yield a profia of 310 and 280 thousand dollars respectively. If the demand turns out to be moderate, then the profits will be 120 and 90 thousand dollars respectively. If the demand turns out to be low, then the profits will be -78 and -10 thousand dollars respectively. The prior probability estimates of demand to be high, moderate and low are 0.45, 0.35 and 0.2 respectively. The company first needs to decide whether to hire an expert to provide more accurate information regarding the future denind levels or not. . Graph the decision tree and state the decision strategy using the following probabilities: P(F) -0.75 P(low | F) - 0.1 P(low U) -0.5 P(High) - 0.45 P(moderateF) - 0.2 P(moderate | U) -0.4 P(moderate) - 0.35 P(U) = 0.25 P(HighF) -0.7 P(High |U)-0.1 P(Low) -0.2 Which of the decision alternatives should be selected by the company? Calculate and interpret the expected profit from the best decision altemative
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