A company is engaged in the process of launching a new product. The top management of the company…

A company is engaged in the process of launching a new product. The top management of the company has three options in terms of launching the product in three sales zones: North region(N), South region (S), and East region. The management has decided to take the final decision on the basis of demand for the product, which is devided in to three categories: high demand, medium demand, and low demand. On the basis of apst data and management’s view, the respective probabilities for three categories of demand are estimated to be 0.45, 0.35, 0.20. Following table indicates the estimated profit (in thousand rupees) for various combinations of events and acts: Table – Estimated profit (in thousand rupees) for various combinations of events and acts Demand Probability Course of action North Region(N) South Region(S) East Region(E)_ High 0.45 100 – 60 – 120 Medium 0.35 80 – 20 40 Low 0.20 60 150 135 Construct a decision tree and select the alternative with highest expected payoff, using expected value criterion.

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