What to submit: The final submission must be ONE Excel $($or Word or PDF$)$ file with answers to all the questions $($one sheet per question$).$

Question $1$:

Global Travel Services $($GTS$)$ plans to introduce a new range of vacation packages in a specific region. The company is considering three options: an option that offers only luxurious beach resorts, an option that offers only adventurous mountain retreats, and an option that offers only cultural city tours. GTS has conducted market research to estimate the potential demand for each option based on two different scenarios: high demand and low demand. The estimated quarterly profits $($in thousands of dollars$)$ for each option and demand scenario are as follows:

$\backslash$begin$\{$tabular$\}\{|$c$|$c$|$c$|\}$

$\backslash$hline $\backslash$multirow$\{2\}\{*\}\{$ Option $\}$ & $\backslash$multicolumn$\{2\}\{|$c$|\}\{$ Demand for Vacation Packages $\}\backslash \backslash$

$\backslash$cline $\{$

The probabilities for the high demand and low demand scenarios are as follows: P$($High$)=0\mathrm{.}6$ and P$($Low$)=0\mathrm{.}4.$

Using the expected value approach, what is the recommended decision without perfect information for GTS$?$ What is its expected value?

What is the expected value of perfect information for GTS$?$

GTS is also considering conducting a market study that will report either a favorable $($F$)$ or unfavorable $($U$)$ condition based on the market's readiness for the new vacation packages. The relevant conditional probabilities are as follows:

P$($F$|$High$)=0\mathrm{.}9$; P$($U$|$High$)=0\mathrm{.}1$

P$($F$|$Low$)=0\mathrm{.}25$; P$($U$|$Low$)=0\mathrm{.}75$

Determine the decision strategy GTS should follow for each demand scenario $($high and low$)$ and the expected value of these strategies.

What is the efficiency of the information provided by the market study?

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