"IF" "AND" Statement to give 3 different answers

ok, I have the following formula Which I would like to add a third option, essentially "AR" could also equal "Z" However, If "AR" does equal "Z" then the answer must also be "Z"

=IF(AND(BG3="",OR(AR3={"Y","A"})),"Y","")

I thought the following would work but it's not quite right

=IFS(AND(BG4="",OR(AR4={"Y","A","Z"})),"Y","Z","")

I have uploaded an example sheet, the above code is located in column "S"

Any help would be much appreciated