Sarah Chang, owner of a small electronics company, is considering submitting a proposal for an electronic timing system for the 2020 Olympic Games. The deadline for submitting a proposal is six months away. For several years, Changs company has been developing a new microprocessor to create a new timing system that would be superior to any product currently on the market. However, progress in research and development has been slow, and Chang is unsure about whether her staff can produce the microprocessor in time. Chang estimates the chance that they will succeed in developing the microprocessor in time to be 40%. If they succeed in developing the microprocessor, there is an excellent chance that Changs company will win the $1 million Olympic contract. Chang estimates this chance to be 90%.Chang can also submit a proposal based on an alternate inferior timing system that has already been fully developed. She estimates the chance of winning the contract with the existing system to be 5%. The value of the contract, if Chang were to win it, remains at $1 million for the old product as well. She is allowed to submit at most one proposal. If she pursues the new microprocessor, Chang must invest $200,000 in further research and development. In addition, making a proposal requires developing a prototype timing system at an additional cost of $50,000 (regardless of whether the technology used is new or old). Finally, if Chang wins the contract, the finished product will cost an additional $150,000 to produce (regardless of the technology).(a) Construct a decision tree to model Changs decision in Excel using the Precision Tree Software. Attach as Exhibit A. x The tree should reflect the structure and logic of the decision process. x Distinguishing between decision and chance nodes, and naming the various nodes and branches is critical (such that the reader can infer and understand which decision or chance node is being modeled). x Create a tree that is as general as possible do not eliminate certain branches from consideration because of the specific values of the inputs as presented in the case. x Create a single-page printout of your tree as follows: Go to the Page Layout tab. Under the Scale to Fit section (click arrow on bottom right), select Fit to 1 page wide by 1 page tall. A Landscape orientation may give a better fit than a Portrait orientation.(b) Attach a single-page printout (follow instructions above to generate a single-page printout) of the optimal policy suggestion. Attach as Exhibit B. Is the optimal solution to continue with the new venture (i.e. continue the development of the new technology)? YES / NO (Circle one.) If the optimal policy suggestion is to continue developing the new technology (i.e. if you circled YES above), should the company bid with the old technology if the new technology does not develop in time? YES / NO (Circle one.) If you circled NO, at approximately what value of the prototype development cost does it become optimal to bid with old technology if the new one does not develop in time?____________ OIS 5610: HW 4, Fall 2016 Page 3 of 3