Sisyphus, a US company, has agreed to supply Myth stores with 500,000 PC FAX devices at a fixed price within 90 days. One of the important electronic parts of the mentioned fax devices is the integrated circuit called PAL chip. Sisyphus produced such pieces in the past by the American company A.M. It was supplied from Chip. A.M. chips has promised to supply the part in question for $3 each. On the other hand, KEC electronics, a Korean company, submitted a more attractive offer to Sisypus, valid for 10 days. Accordingly, KEC electronics will supply the part for $2 for an order of 250 thousand units, and $1.5 for an order with a volume of 500 thousand or more. Sisyphus is considering supplying some or all of an order of 500k from KEC electronics. However, in case of shortage, part of the supply goes to A.M. It will be available from the chip. On the other hand, A.M. The possibility has arisen that Chip will file an anti-dumping complaint with the ministry against KEC electronics. It does not seem likely that there will be any clarity on this issue within 10 days. Therefore, if the US government decides to apply an anti-dumping tax based on the complaint, it may be possible for Sisyphus to pay these taxes after the purchase. According to the rulers of Sisypus, the probability of applying such a tax is 0.60, and if it is applied, the tax rates will be 50%, 100% and 200% depending on equal chance.

 

A) Draw the decision tree of the problem

B) Determine the optimal decision according to the expected monetary value criterion.

c) Investigate whether the optimal decision would change if the Sisyphus managers had a risk-seeking utility function.