Five thousand new smart camera systems are neededannually

Chapter 18, Problem 18.36

(choose chapter or problem)

Five thousand new smart camera systems are neededannually to expand the security surveillance ofroads, buildings, airports, parks, etc. in a large metropolitanarea. The system components can be obtainedin one of three ways: (1) Make them in one ofthree plants partially owned by the government;(2) Buy them off the shelf from the one and onlymanufacturer; or (3) Contract to have them made tospecifications by a vendor. The estimated annualcost for each alternative is dependent upon specificsof the plant, the producer, or the vendor. The information below details the alternative, a probabilityof occurrence, and the estimated annual cost.(a) Construct and solve a decision tree to determinethe least-cost alternative to provide the components.(b) Once you have chosen the alternative on the tree,use a spreadsheet to determine the change in probabilitythat the Buy alternative requires to make itequally attractive with the chosen alternative.Assume that the probability change will be equallydistributed to the other probability estimates. Writethe new probability values.