Problem 13-07 (Algorithmic) Hudson Corporation is considering three options for managing its data processing operation: continuing with its own staff, hiring an outside vendor to do the managing (referred to as outsourcing), or using a combination of its own staff and an outside vendor. The cost of the operation depends on future demand. The annual cost of each option in thousands of dollars) depends on demand as follows: Demand Staffing Options High Medium Low Own staff 625 500 400 Outside vendor 850 650 350 Combination 600 400 300 a. If the demand probabilities are 0.4, 0.25, and 0.35, which decision alternative will minimize the expected cost of the data processing operation? Combination What is the expected annual cost associated with that recommendation? If required, round your answer to the nearest thousand of dollars. Expected annual cost = $ X b. Construct a risk profile for the optimal decision in part (a). Cost Probability 600 0.4 400 0.25 300 0.35 10