Modern Electronics specializes in manufacturing modern electronic components.

It also builds the equipment that produces

Strong Fair Poor Expected Value

Large 550000 110000 -310000 158000
Medium 300000 129000 -100000 134500
Small 200000 100000 -32000 103600
None 0 0 0 0

Probability 0.3 0.5 0.2

We see from the table of payoff and expected values that if the company builds a large facility, its expected profit will be the h
Therefore, it is recommended that the company build a large-size facility.
he equipment that produces the components. Modern Electronics is considering building a new facility but the estimated profits would b

expected profit will be the highest.

estimated profits would be impacted by the type of market that develops. The probability for a strong market is 0.3; for a fair market i
t is 0.3; for a fair market is 0.5; and for a poor market is 0.2. You are responsible for advising the president of Modern Electronics on th
of Modern Electronics on the type facility that should be built or to not build a facility at all. The table shows the estimated profits under
he estimated profits under each market and for each size facility. Strong Fair Poor Build a large 550,000 110,000 -310,000 Build a med
000 -310,000 Build a medium-size 300,000 129,000 -100,000 Build a small 200,000 100,000 -32,000 Do not build a 0 0 0 develop a re
build a 0 0 0 develop a recommendation for your president. Be sure to explain why you are making the recommendation that maximiz
mmendation that maximizes profit and minimizes lost