A manager in a manufacturing company is trying to decide whether to expand the present production facility, or subcontract to increase production capacity, or to build a new production facility. Depending on future demand levels, the payoffs (or losses in $thousands) associated with the alternatives have been estimated and placed in the following table:

High Demand Moderate Demand Low Demand

Expand 200 100 -25

Alternatives Subcontract 225 50 25

Build 200 100 *

Probability .4 .3 .3

* If the manager of the company decides to build a new facility and the demand turns out to be low, then he has three options. He can do nothing which would result in a loss of $200,000. He can rent out the facility which could create a profit of $450,000 with 50% probability or a profit of $100,000 with 50% probability. Or he can decide to sell the facility to earn a profit of $250,000.

Construct a decision tree which illustrates the decisions.