Senior management at Humber bakery requested a new analysis based on adjusting the selling price and the number of units produced under each production plan. Initial probability estimates are also updated. Resulting gross profits ($) and state of nature probabilities are given in the following payoff table.

	Low Demand	Medium Demand	High Demand
Light Production	30,720	39,100	39,100
Moderate Production	13,290	46,810	51,000
Heavy Production	-26,550	6,970	78,200
Probability	0.2	0.3	0.5

The new analysis also necessitated updating the offer made to Bramptinos under the heavy production plan. If Humber chooses the heavy production plan, the probability that Bramptinos will accept the new offer is 23% and the associated gross profit is determined to be $73,600. Again here, if Bramptinos declines the offer, the loaves will still sell based on current demand conditions (low, medium, or high). Use the decision tree you selected from Part A, along with the payoffs and probabilities provided on this page, to construct a decision tree for the problem. I. No Sample Information What is the expected monetary value and associated decision for the optimal alternative? Max EMV = $ The optimal decision is Select an answer Moderate Light Indifferent Moderate or Heavy Heavy Light or Moderate Light or Heavy production. II. Sample Information As noted earlier, Humber is considering hiring Professor Leung to conduct a market research survey. It is now determined that the results of the survey will indicate an unfavourable market condition with 44% chance. Otherwise, it will indicate a favourable market condition. If the survey provides a favourable outlook, the revised probabilities of medium and high demand are 0.34 and 0.36 respectively. If unfavourable, the probabilities calculated for low and high demand are 0.43 and 0.27 respectively.

Using the given sample information, create a multistage decision tree based on the tree you selected in Part A (IIa). Solve the tree.

Select an answer Conduct the market survey. If favourable, choose the Moderate plan. If unfavourable, choose the Light plan. Conduct the market survey. If favourable, choose the Heavy plan. If unfavourable, choose the Moderate plan. Conduct the market survey. If favourable, choose the Moderate plan. If unfavourable, choose the Heavy plan. Conduct the market survey. If favourable, choose the Heavy plan. If unfavourable, choose the Heavy plan. Conduct the market survey. If favourable, choose the Light plan. If unfavourable, choose the Heavy plan. Do not conduct the market survey and choose the Heavy plan. Conduct the market survey. If favourable, choose the Light plan. If unfavourable, choose the Moderate plan. Do not conduct the market survey and choose the Light plan. Do not conduct the market survey and choose the Moderate plan.

1. What is the best expected monetary value and associated decision under a favourable survey outcome? Max EMV = $ The optimal decision is Select an answer Heavy Moderate Light Light or Heavy Indifferent Moderate or Heavy Light or Moderate production.
3. What is the best expected monetary value and associated decision under an unfavourable survey outcome? Max EMV = $ The optimal decision is Select an answer Moderate Indifferent Light Light or Moderate Moderate or Heavy Light or Heavy Heavy production.
5. What is the expected value with the sample information? EV with SI = $
6. What is the expected value of the sample information (EVSI)?
7. EVSI = $
12. What is the optimal decision strategy if Professor Leung's consulting fees were $5258.