DATA: https://docs.google.com/spreadsheets/d/1AwbWgj09keDs6S5N-limjOXSthXOPkAc/edit?usp=sharing&ouid=115011566029800565379&rtpof=true&sd=true

PLE has developed a prototype for a new snowblower. Initially, PLE faces two possible decisions: introduce the product globally at the cost of $850,000 or evaluate it in a North American test market at the cost of $200,000. If it introduces the product globally, PLE might find either a high or low response to the product. The probabilities of these events are estimated to be 0.6 and 0.4, respectively. With a high response, gross revenues of $2,000,000 are expected; with a low response, the figure is $450,000. If PLE starts with a North American test market, it might find a low response or a high response, with probabilities of 0.3 and 0.7, respectively. If the North American response is high and PLE stays only in North America, the expected revenue is $1,200,000. If it markets globally (at an additional cost of $200,000), the probability of a high global response is 0.9 with revenues of $2,000,000 ($450,000 if the global response is low). If the North American response is low and remains in North America, the expected revenue is $200,000. If it markets globally (at an additional cost of $600,000), the probability of a high global response is 0.05, with revenues of $2,000,000 ($450,000 if the global response is low).

Construct a decision tree, determine the optional strategy and develop a risk profile associated with the optimal strategy. What did you learn