QUESTION FOUR Mwananyamala Physiotherapy Center specializes in the provision of medical dietary advice to its clients. The service is provided on a residential basis and clients stay for whatever number of days suits their needs. Budgetary estimates for the next year ending 31 December 2022 are as follows: (a) The maximum capacity of the Centre is 50 clients per day for 350 days in a year. (b) Clients will be invoiced at a fee per day. The budgeted occupancy level will vary with the client fee level per day and is estimated at different percentage of maximum capacity as follows: Client fee per day (TZS) 180,000 200,000 220,000 Occupancy level High Most Likely Low Occupancy as percentage of maximum capacity 90% 75% 60% (c) Variable costs are also estimated at one of three levels per client day. The high, most likely and low levels per client day are TZS 95,000, TZS 85,000 and TZS 70,000 respectively. The range of cost levels reflects only the possible effect of the purchase prices of service. Required i. Present the above information by way of a decision tree, showing clearly the budgeted contribution to be earned by the Centre for each possible outcome. (5 Marks) ii. State the client fee strategy for the next year which will result from the use of each of the following decision rules: (a) Maximax (b)Maximin (c) minimax regret. iii. (9 Marks) The probabilities of variable cost levels occurring at high, most likely and low levels provided in the question are estimated at 0.1, 0.6 and 0.3 respectively. Using the information available, determine the client fee strategy which will be chosen where maximization of expected value of contribution is used as the decision basis. (6 Marks)