Using specified data files, chapter example files, and templates provided in the Topic materials and as a part of this assignment, complete Chapter 9, Case 9.3 (part a) in the textbook. Use the Palisade DecisionTools PrecisionTree Excel software to create the decision tree. Note that only part (a) of the case needs to be completed. Specify the optimal decision.

Sarah Chang is the owner of a small electronics company. In six months, a proposal is due for an electronic timing system for the next Olympic Games. For several years, Changs company has been developing a microprocessor, a critical component in a timing system that would be superior to any product currently on the market. However, progress in research and development has been slow, and Chang is unsure whether her staff can

produce the microprocessor in time. If they succeed in developing the microprocessor (probability p1), there is an excellent chance (probability p2) that Changs company will win the $1 million Olympic contract. If they do not, there is a small chance (probability p3) that she will still be able to win the same contract with an alternative but inferior timing system that has already been developed. If she continues the project, Chang must invest $200,000 in research and development. In addition, making a proposal (which she will decide whether to do after seeing whether the R&D is successful) requires developing a prototype timing system at an additional cost. This additional cost is $50,000 if R&D is successful (so that she can develop the new timing system), and it is $40,000 if R&D is unsuccessful (so that she needs to go with the older timing system). Finally, if Chang wins the contract, the finished product will cost an additional $150,000 to produce.

1. Develop a decision tree that can be used to solve Changs problem. You can assume in this part of the problem that she is using EMV (of her net profit) as a decision criterion. Build the tree so that she can enter any values for p1, p2, and p3 (in input cells) and automatically see her optimal EMV and optimal strategy from the tree.