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Suppose that Mr . William Bell owns a manufacturing facility in Kentucky, which happens to be in a seismic zone ( i . e .

Suppose that Mr. William Bell owns a manufacturing facility in Kentucky, which
happens to be in a seismic zone (i.e., an area where earthquakes tend to happen). It is
known that the probability of an earthquake in the area is 15%. If there is an
earthquake, the estimated total cost of damage to the facility (and to Mr. Bell's
business) is uniformly distributed between $30 million and $90 million. There are at
least two options for you to mitigate such a risk. The first option is to retrofit your
facility to make it more resistant to seismic activities. The retrofit will cost $40
million. After the retrofit, you estimate that the total cost of damage after an
earthquake would be uniformly distributed between 10 and $30 million. The second
option is to relocate your facility to an earthquake-free area, which would completely
eliminate any potential damage due to earthquakes. But the cost will be $50 million.
(Note: You can ignore the time value of the money when answering the following
questions.)
a.(20 pts) Draw a decision tree for this decision. For the continuous
distributions, please use either the extended Pearson-Tukey method or the
bracket median method to discretize them. (Make sure to write out the
appropriate numbers at appropriate places of the tree.)
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