QUESTION 2 (20 marks) ABC Inc. must make a decision on its current capacity for next year. Estimated profits (in $000s) based on next year's demand are shown in the table below. Next Year's Demand Alternative Low High Expand $100 $200 Subcontract $50 $120 Do Nothing $40 $50 1) Refer to the information above. a. Which alternative should be chosen based on the maximax criterion? b. Which alternative should be chosen based on the maximin criterion? c. Which alternative should be chosen based on the Lapalce criterion? d. Which alternative should be chosen based on criterion of realism with alpha = 0.7? e. Which alternative should be chosen based on the minimax regret criterion? 2) Refer to the information above. Assume that ABC Inc. has hired a marketing research firm that provided additional information regarding next year's demand. Suppose that the probabilities of low and high demand are assessed as follows: P(Low) = 0.4 and P(High) = 0.6. a. Which alternative should be chosen using the expected monetary value (EMV) criterion? b. What is the expected value under certainty? c. What is the expected value under perfect information (EVPI)? 3) Refer to the information above. Assume that ABC Inc. has hired a marketing research firm that provided additional information regarding next year's demand. Suppose that the probabilities of low and high demand are assessed as follows: P(Low) = 0.4 and P(High) = 0.6. a. Develop a decision tree for this problem. b. Analyze the decision tree and determine which alternative should be chosen. c. Using the expected opportunity loss (EOL) criterion, which alternative should be chosen