AccuTestis manufacturing automatedblood pressure devices intended to use at home. At present, they have a verysuccssfulproduct line calledTrueTense, which theycurrenlymanufacture at the cost of $120 per device. Utilizing latesttechnologessuch asIoT(internetof things), wearable electronics,andusingadvanced software, their preliminary research identified two potential new products.

AccuTesthas limited engineeringresroucesand given initial estimates they can effectively focus on only one of the three possible design alternatives in order to launch their product by the end of this year.

If they choose to improveTrueTensewith newtechnolgy, they estimate that their cost per device will be reduced to $100 and the cost of development is estimated at $20,000. In the event that the marketing campaign for improvedTrueTenseissuccesfulprojected annual demand is 9,000 units. However, if the market does not respond well to the upgradedprodut, the demand is projected to be 3,000 units per year.

WebTenseis one of their new proposed products, which could be outsourced for a cost of $95, and if the marketing campaign is a success projected demand is 6,000 devices per year. If the market campaign fails, projected annual demand is still projected at 6,000 units. The development cost is estimated to be $30,000.

Another option is to developArmTense, a wearable device, which they would produce in house for a projected cost of $85 per unit at development cost of $25,000. If the marketing campaign is a success, projected demand is 7,000 units. Alternatively, unsuccessful marketing campaign projects the demand at 5,000 units per year.

Finally, given their historical performance, marketing department estimates that there is a 75%likelihoodthat they will besuccessfulin marketing any of theAccuTestproduct alternatives.

AccuTestwill make their decision based on minimized total costcalculatedfrom projected demand, unit cost and product development cost.

Prompt:

- Completethe following decision table for Optimistic, Pessimistic and Expected Value Criterion (Note: Round allnumbersto thousands without decimal places and without $ sign).

- Once you complete the table enter the appropriate decision alternativenumberin the space provided for each criterion (Note: Do not type any characters other than ONE of the three decision alternative numbers!):

Enter:1for ImprovedTrueTense

Enter:2forWebTense, or

Enter:3forArmTense

Alternatives	States of Nature (Total Cost in thousands $'s)	Optimistic	Pessimistic	Expected Value
Market Success	Market Failure
(1) ImprovedTrueTense
(2) NewWebTense
(3) NewArmTense

- Using Optimistic Criterion Only, AccuTest should chose decision alternative

- Using Pessimistic Criterion Only, AccuTest should chose decision alternative

- Using Expected Value Criterion Only, AccuTest should chose decision alternative