Iron Butterfly Company submits proposals in response to RFPs and faces three possible outcomes: N1, Iron Butterfl y gets a full contract; N2, it gets a partial contract (job is shared with other contractors); N3, it gets no contract. The company is currently assessing three RFPs, coded P1, P2, and P3. For P3, the customer will pay a fi xed amount for proposal preparation; for P1 and P2, Iron Butterfly must absorb the proposal preparation costs, which are expected to be high. Based upon project revenues and proposal preparation costs, the expected profits ($ thousands) are as shown:
N1 N2 N3
P1 500 200 -300
P2 300 100 -100
P3 100 50 25
To which RFPs would Iron Butterfl y respond using the three decision criteria?