A workshop is about to install a new machine for stamping and pressing parts for domestic appliances. Three suppliers have made bids to supply the machine. the first supplier offers the Basicor machine, which automatically produces parts of acceptable, but not outstanding quality. The output from the machine is variable (depending on material supplied and a variety of settings) but could be 1000 a week (with probability o.1), 2000 a week (with probability 0.7) or 3000 a week. The notional profit for this machine is $4 a unit. the second supplier offers a Superstamp machine, which makes higher quality parts. the output from this can be 700 a week (with probability 0.4) or 1000 a week, with a notional profit of $10 a unit. the third supplier offers the Switchcover machine, which can be set to produce either 1,300 high-quality parts a week at a profit of $6 a unit, or 1600 medium-quality parts a week with a profit of $5 aunit.
If the machine produces 2000 or more units a week, it is possible to export all production as a single bulk order. Then there is a 60% chance of selling for 50% more profit, and a 40% chance of selling for 50% less profit. What should be done to maximize expected profits?