Iron Butterfly, Inc. submits proposals in response to RFPs. The outcome of submitting a proposal is one of three cases: N1, Iron Butterfly gets a full contract;

N2, Iron Butterfly gets a partial contract (job is shared with other contractors);

N3, Iron Butterfly gets no contract. Iron Butterfly is currently assessing three project RFPs code named P1, P2, and P3. The customer for P3 will pay a fixed amount for proposal preparation; for P1 and P2 Iron Butterfly must absorb all of the proposal-preparation costs, which are expected to be high. Based upon project revenues and proposal-preparation costs, the expected profits ($ thousands)

are as shown:

To which RFPs would Iron Butterfly respond using the various uncertainty criteria?

Transcribed Image Text:

N1 N2 N3 P1 500 200 -300 22 P2 300 100 -100 P3 100 50 25