the decision tree for this problem

Provide the decision for each of the following decision strategies

1. Assume you have no idea about the probabilities regarding the occurrence chance of state of the nature nodes (i.e. assume you are NOT given the probabilities of low demand and high demand). Under decision making complete uncertainty find the best decision by adopting following point s of view:

1. • Optimistic
   • Pessimistic
   • Laplace/Liberal
2. Show the best choice for the decision taken under risk.
3. Provide the value of perfect information by taking the difference of the value of decision under complete certainty and decisions under risk.

A retailer must decide whether to build a small or a large facility at a new location. Demand at the location can be either low or high, with probabilities estimated to be 0.4 and 0.6, respectively. If a small facility is built and demand proves to be high, the manager may choose not to expand (payoff = $223,000) or to expand (payoff = $270,000). If a small facility is built and demand is low, there is no reason to expand and the payoff is $200,000. If a large facility is built and demand proves to be low, the choice is to do nothing ($40,000) or to stimulate demand through local advertising. The response to advertising may be either modest or sizable, with their probabilities estimated to be 0.3 and 0.7, respectively. If it is modest, the payoff is estimated to be only $20,000; the payoff grows to $220,000 if the response is sizable. Finally, if a large facility is built and demand turns out to be high, the payoff is $800,000