Please answer question 3 and 4 only. I answered the first 2 but need help on the 3rd and 4th

However, some in the management think that the development and production of drug B entails too much risk and uncertainty, and it would be better to focus on drug A only. The company is considering hiring the Edinburgh Medical Research Company (EMRC) from UK to estimate their chances with the development and financial success of drug B. EMRC experts will provide a favourable report (success is the most likely outcome of the drug B research) or an unfavourable report (the research for drug B will most likely end up in failure). Success means that the medication with expected properties is created and approved by Health Canada. It is known that there is a 90% chance that EMRC provides a favourable report given the positive outcome. There is also an 80% chance that EMRC provides an unfavourable repot given the negative outcome. EMRC specialists need six months to complete their analysis and request $10 million as they have to use expensive equipment and hire additional staff. Of course, the company would like to get a report from EMRC before they make a decision and submit their proposal to Hirschmann Scientific Foundation. The company needs a qualified second opinion, as at the moment opinions among management itself are sharply divided and votes are split.

Please perform an analysis of the problem facing the Jean-Jacques Berthoud Pharmaceutical Company (Berthoud), and prepare a report that summarizes your findings and recommendations. Include the following items in your report:

1. A (simple) decision tree that shows the logical sequence of the decision problem given the EMRC research information is not available.

2. A recommendation regarding what Berthoud should do if the EMRC information is not available.

3. A decision strategy that Berthoud should follow if the research is conducted based on the posterior probabilities and a revised decision tree.

4. A recommendation as to whether Berthoud should employ EMRC, along with the detailed decision policy, the value of the information provided by the research firm and the efficiency of this information.

Use Excel TreePlan to construct both decision trees. Include the details of your analysis as well as the TreePlan output as an appendix to your report.

Not necessarily, every promising idea ends up in success. If funding is received for drug A, then, realistically speaking, the detailed forecast would look like this; Outcomes for drug A research Probabilin Profit/Loss (S millions) Great success 0.20 450 Moderate success 0.10 200 Some SICCess 0.30 50 No success 0.40 - 100 If funding is received for drug B, then the detailed forecast would not be readily available as the research will be based on the methods that have never been used before. Then the forecast would look like this: Outcomes for drug B research Probabilin Profit/Loss (S millions) Success 0.25 1000 Failure 0.75 - 250 If the company is denied financial support or prefers not to apply, then it will continue to produce the existing types of medications will