Question 1 (40 points): The systems engineering project manager for ENG company is currently faced with the question of whether to award a $100,000 contract to SW software company. The project manager has three internal ratings (poor risk, average risk, and good risk) for evaluation of a contractor, but does not know which category fits the SW software company. Internal ratings indicate that 20% of similar companies are poor risks, 50% are average risks, and 30% are good risks. If contract is awarded the expected profit for poor risk is -$15,000, for average risk $10,000, and for good risk $20,000. If contract is not awarded the ENG company expected payoff is $0. | The project manager can consult an external rating organization for a fee of $5,000. For each of the three internal ratings, the following table shows the percentages given through external ratings as poor, average, and good risks. External Rating (Findings) Poor Risk Average Risk Good Risk Poor Risk (20%) 50% 40% 10% Internal Rating (States) Average Risk (50%) Good Risk (30%) 40% 20% 50% 40% 10% 40% a) Build the decision tree and identify the resulting optimal policy for ENG Company. The project manager can consult an external rating organization for a fee of $5,000. For each of the three internal ratings, the following table shows the percentages given through external ratings as poor, average, and good risks. External Rating (Findings) Poor Risk Average Risk Good Risk Internal Rating (States) Poor Risk (20%) Average Risk (50%) Good Risk (30%) 50% 40% 20% 40% 50% 40% 10% 10% 40% a) Build the decision tree and identify the resulting optimal policy for ENG Company. Question 1 (40 points): The systems engineering project manager for ENG company is currently faced with the question of whether to award a $100,000 contract to SW software company. The project manager has three internal ratings (poor risk, average risk, and good risk) for evaluation of a contractor, but does not know which category fits the SW software company. Internal ratings indicate that 20% of similar companies are poor risks, 50% are average risks, and 30% are good risks. If contract is awarded the expected profit for poor risk is -$15,000, for average risk $10,000, and for good risk $20,000. If contract is not awarded the ENG company expected payoff is $0. | The project manager can consult an external rating organization for a fee of $5,000. For each of the three internal ratings, the following table shows the percentages given through external ratings as poor, average, and good risks. External Rating (Findings) Poor Risk Average Risk Good Risk Poor Risk (20%) 50% 40% 10% Internal Rating (States) Average Risk (50%) Good Risk (30%) 40% 20% 50% 40% 10% 40% a) Build the decision tree and identify the resulting optimal policy for ENG Company. The project manager can consult an external rating organization for a fee of $5,000. For each of the three internal ratings, the following table shows the percentages given through external ratings as poor, average, and good risks. External Rating (Findings) Poor Risk Average Risk Good Risk Internal Rating (States) Poor Risk (20%) Average Risk (50%) Good Risk (30%) 50% 40% 20% 40% 50% 40% 10% 10% 40% a) Build the decision tree and identify the resulting optimal policy for ENG Company