Question

An enginner has to decide whether to construct an automated or conventional plant. If the automated plant is build

there is a high or a low demand with probabilities 0.60 and 0.40 respectively. If a conventional plant is build there is a high or a low probabilities 0.70 and o.30 respectively. If an automated plant is build and the demand is high there is a probability of an expansion 0.55 but if the demand was low there is a probability of an expansion of only 0.10. If an conventional plant is build and the demand is high there is a probability of an expansion of 0.80 but if demand is low there is a probability of expansion of 0.15. Construct a decision tree and choose the best alternative . a. Conventional plant with an expected profit $577,000 b. Automated plant with an expected profit $874,250 c. Conventional plant with an expected profit $874,250 d. Automated plant with an expected profit $577,000

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