A company is a leading manufacturer of robotic arms. All robot arms are manufactured in their plant in Ontario, and shipped to distribution centers or major customers. The company recently acquired a direct competitor in BC$,$ and is considering moving its operations to the BC plant. Considerations in this decision are the transportation, labor, and production costs at the two plants. Marketing is also predicting a decline in the demand. The company developed three scenarios:

$1.$ Demand falls slightly, with no noticeable effect on production.

$2.$ Demand and production decline $20\%.$

$3.$ Demand and production decline $40\%.$

The following table shows the total costs under each decision and scenario:

Slight Decline $20\%$ Decline $40\%$ Decline

Stay in Ontario $ $1,000,000$ $ $900,000$ $ $840,000$

Move to BC $ $1,200,000$ $ $915,000$ $ $800,000$

a$)$ What decisions should the company make using each strategy?

$-$ Aggressive strategy

$-$ Conservative strategy

$-$ Opportunity loss strategy

b$)$ If the probabilities are estimated to be $0\mathrm{.}15,0\mathrm{.}4,$ and $0\mathrm{.}45$ respectively, what is the optimal decision based on expected value?

Question $2$

Try to construct your own decision problem with a set of decision alternatives and possible outcomes under different scenarios. Answer what decision you will make$/$recommend based on your strategy or expected value