The XY Manufacturing Company must decide whether to manufacture a component part at its plant or purchase the component part from a supplier. The resulting profit is dependent upon the demand for the product. The following payoff table shows the projected profit (in ten thousand of pesos):

	State of Nature
	Low demand, s1	Medium demand, s2	High demand, s3
Manufacture, d1	-100	200	500
Manufacture d2	50	225	350

The state-of-nature probabilities are P(s1) = 0.35, P(s2) = 0.35, and P(s3) = 0.30.

a. Use a decision tree to recommend a decision. b. Use EVPI to determine whether XY Manufacturing Company should attempt to obtain a better estimate of demand. c. A test market study of the potential demand for the product is expected to report either a favorable (F) or unfavorable (U) condition. The relevant conditional probabilities are as follows:

P(F | $,) = 0.10 P(U | $) = 0.90 P(F $2) = 0.40 P(U | $2) = 0.60 P(F $3) = 0.60 P(U S3) = 0.40