Hiring proGuards Services

The requirement of opening all skindows is particularly worri-some to CO because it means turning off the alarm system, leaving the warehouse  vulnerable to burglary for 48 hours— the required amount of time 11)r the poisonous gas to do its job. Therefore, Alex Ferrari. the warehouse manager. is thinking about hiring a security cornpan) to monitor the facility during that period. CCI's property insurance deductible is $25.000. and Alex is assuming that if thieves are IN filling to enter a building full of poisonous gas to steal some-thing. they would certainly take more than $25,000 worth of parts—or even an entire car! After making a few phone calls, Alex gets in ProGuard, a trustworthy local security company that charges with per hour to have a security guard stationed outside their Wateh's1SC) The city of Miami police records indicate that about 30% that left their facilities unattended during tenting repone414 len property in the past 3 years. Although Alex thinks proGu, prices are reasonable, and having a guard outside the wiatel14,14. would certainly help, he is still not sure whether it is worth spend.i the extra money. After all, ProGuard's contract does not guaranllt the protection it provides is infallible. In fact, an analysis of the coteem-pany's records indicates that 3% of their clients were burglarized over the past 3 years. (Despite this figure, ProGuard is still the hst security company in the area.)  Discussion Questions 1. Create a decision tree analysis to help decide whether Alex Ferran should hire ProGuard's services. 2. Come up with a simple rule of thumb that can be applied to deci-sions of this nature, given any deductible amount d, extra surveil-lance cost c, and burglary probabilities pt (without surveillance) and p2 (with surveillance). 3. Does your decision based on the tree guarantee success?