Southland Corporation’s decision to produce a new line of recreational products resulted in the need to construct either a small plant or a large plant. The best selection of plant size depends on how the marketplace reacts to the new product line. To conduct an analysis, marketing management has decided to view the possible long-run demand as low, medium, or high. The following payoff table shows the projected profit in millions of dollars:

	Long-Run Demand
Plant Size	Low	Medium	High
Small	200	240	280
Large	90	220	300

1. What is the decision to be made, and what is the chance event for Southland’s problem?

b. Choose the correct influence diagram for this problem. (1) Plant Size Market Demand Plant Size Market Demand Pro: (iii) (iv) Market Demand Market Demand Profit Profit Plant Size Plant Size c. Choose the correct decision tree for this problem. (i) ) 200 Low 200 240 Medium 90 Low Small Small Low 240 Medium 280 High 220 Medium 220 Large 280 Medium 19- High Large Low 300 300 High High (iv) 200 Small Low 90 200 Large Low 240 240 Small Small Medium 280 Medium High 220 90 Large Low 280 220 Small Large Medium 300 High High 300 Large d. Recommend a decision based on the use of the optimistic, conservative, and minimax regret approaches. Optimistic approach Conservative approach Minimax regret approach b. Choose the correct influence diagram for this problem. (1) Plant Size Market Demand Plant Size Market Demand Pro: (iii) (iv) Market Demand Market Demand Profit Profit Plant Size Plant Size c. Choose the correct decision tree for this problem. (i) ) 200 Low 200 240 Medium 90 Low Small Small Low 240 Medium 280 High 220 Medium 220 Large 280 Medium 19- High Large Low 300 300 High High (iv) 200 Small Low 90 200 Large Low 240 240 Small Small Medium 280 Medium High 220 90 Large Low 280 220 Small Large Medium 300 High High 300 Large d. Recommend a decision based on the use of the optimistic, conservative, and minimax regret approaches. Optimistic approach Conservative approach Minimax regret approach