Reference no: EM132297001

GoBig Manufacturing is trying to decide between building a new production line, and buying and existing production line from a competitor. Chris, an analyst at GoBig, estimated profit of $ 210,000 if they build a new production line and low demand occurs and a profit of $450,000 if high demand occurs. If GoBig buys an existing production line, Chris estimated a profit of $340,000 if low demand occurs and a profit of $390,000 if high demand occurs. If GoBig decides not to conduct additional market research, Chris estimated the probability of high demand at 64%. She also estimated that if GoBig decided to conduct market research the probability of getting favorable report is 0.80, the probability of high demand given a favorable report is 0.70, and the probability of low demand given unfavorable report is 0.60.