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Business, 28.08.2019 02:30 21580

Hudson corporation is considering three options for managing its data processing operation: continuing with its own staff, hiring an outside vendor to do the managing (referred to as outsourcing), or using a combination of its own staff and an outside vendor. the cost of the operation depends on future demand. the annual cost of each option (in thousands of dollars) depends on demand as follows: demand staffing options high medium low own staff 650 650 600 outside vendor 900 600 300 combination 800 650 500 a) what is the best strategy using the optimistic, conservative and minimax regret approach? show all your work separately for each approach. show the best strategy and associated pay off for each approach. b) if the demand probabilities are 0.2, 0.5 and 0.3, draw the decision tree. c) which decision alternative will minimize the expected cost of data processing operation? what is the expected annual cost associated with that recommendation?

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