: A toy manufacturer has three different mechanisms that can be installed in a doll that it sells. The different mechanisms have three different setup costs (overheads) and variable costs and, therefore, the profit from the dolls is dependent on the volume of sales. The anticipated payoffs are as follows.

	Wind-up action	Pneumatic action	Electrical action	Probability
Light Demand	$325,000	$300,000	-$400,000	0.25
Moderate Demand	$190,000	$400,000	$420,000	0.45
Heavy Demand	$170,000	$420,000	$800,000	0.3