East Coast Import is considering two alternative advertising and marketing plans for a new line of consumer products it buys from a manufacturer in Singapore. The first plan involves contracting with a television shopping channel and is projected to have a cost of $200,000. East Coasts marketing director has analyzed this alternative and, after a joint meeting with the shopping channels manager, believes that the following probability distribution for additional profit generated is accurate:

Increased Revenue ($)	Probability
130,000	0.2
200,000	0.5
220,000	0.3

The second marketing alternative to rely on advertising in airline magazines and newspaper inserts is projected to have a cost of $120,000. However, the marketing director thinks that this approach would not be effective for generating added revenue as the shopping channel approach. This is reflected in the following probability distribution:

Increased Revenue ($)	Probability
90,000	0.3
120,000	0.4
160,000	0.3

The company has decided not to try both approaches simultaneously.

Use a decision tree to make your recommendation about which approach to take.

Although the company has decided not to try both approaches simultaneously, the managers did agree that if the print-advertising approach is chosen and results in $90,000 in added revenues, they may make a second decision about whether to switch to the shopping channel for an additional cost of $220,000. They assume the probabilities and outcomes of the shopping channel option would not be changed, but all profit projections will be reduced by this cost.

Use a decision tree to recommend a strategy for the company.

[Hint: Think about how many decision nodes you need to model this problem.]