QUESTION 3 Tree diagrams show different situations that may occur as the project unfolds, the likelihood of the situation occurring and the consequences to the project if it does. The advantages of using a decision tree is that it helps structure the decision process in an orderly and sequential manner and forces the decision maker to examine all possible outcomes. Hi-tech Inc., a local manufacturing company must decide whether to build a large warehouse or to build a small warehouse. The resulting profits is dependent upon the demand for the ventilator which is their main product. Consider the scenario above and construct a decision tree using the projected profits in the table below. Identify the best decision based on expected payoffs. The table below shows the projected profits Decision Alternative Volume High Volume Low Demand Demand 60% 40% Big Warehouse R20 000 000 R4 000 000 Small Warehouse R14 000 000 R2 500 000