Star Company's manager, Tom, is thinking about production of a new product.

Tom is considering three different products. Tom would like to select a product

with highest profit. Following table contains the expected selling price and

costs for each product:

Tom expects the same demand for all three products.

Require:

Review Chapter $3$ Appendix in text book, the PP slides and video for Chapter $3$

Appendix and answer the following.

Step $1$: Identify a choice criterion.

Step $2$: Identify the set of alternative actions that can be taken.

Step $3$: Identify the set of events that can occur.

Step $4$: Assign a probability to each event that can occur.

Step $5$: Identify the set of possible outcomes.

Calculate the expected value for each option.