Reference no: EM13524279

Modern Electronics specializes in manufacturing modern electronic components. It also builds the equipment that produces the components. Modern Electronics is considering building a new facility but the estimated profits would be impacted by the type of market that develops. The probability for a strong market is 0.3; for a fair market is 0.5; and for a poor market is 0.2. You are responsible for advising the president of Modern Electronics on the type facility that should be built or to not build a facility at all. The table shows the estimated profits under each market and for each size facility.
Estimated Profits
Strong Market Fair Market Poor Market
Build a large facility 550,000 110,000 -310,000
Build a medium-size facility 300,000 129,000 -100,000
Build a small facility 200,000 100,000 -32,000
Do not build a facility 0 0 0

1. Provide a recommendation to the president that maximizes profits
2. Provide a second recommendation to the president that minimizes regret.