Freemark Abbey

In: Business and Management

Submitted By faisalalimalik
Words 576
Pages 3
Decision Analysis DISC 321
Case 2

Group 3
Hafsa Siddique 17110055
Faisal Ali 17110282
Aleem ud din Khan 17110267
Hassaan Butt 17110117

We first divided the mess being analyzed into a clear, structured problem statement as follows
Objective: To decide if Freemark Abbey Winery should harvest the Riesling grapes immediately or leave them on the vines despite the approaching storm.
1-We assumed that the list of possibilities provided is mutually exclusive as well as exhaustive. This means that either one has to occur, as well as no other possible option exists.
2-The payoffs are calculated based on 1000 cases of wine.
3-The given probabilities accurately reflect reality
At the moment Freemark Abbey Winery has two alternatives: to harvest or not to harvest. If they choose not to harvest there is 50% chance that storm might hit. And if the storm hits there is a probability of 40% that Botryis mold will form which will significantly affect the revenue. Freemark Abbey Winery faces another decision if the storm hits and Botryis mold will not form, because if Botryis mold will not form the sugar level which determines the quality of wine and revenue will be different, so the decision that they faces is that whether to sell the grapes in bulk or to make and sell the wine themselves.
If the storm hits and mold is formed then the revenue will be 67,200 but the chance of this happening is only 40%. As compared to this there is a 60% chance that mold will not form if storm hits and in that case company will either sell grapes in bulk or they will compromise on the quality of the wine and will produce and sell thin wine at $2.00/bottle.
We will analyze the both cases, that is, either to produce thin wine or to sell it in bulk, separately.

Case 1 (sell in bulk):
If they decide to sell the grapes in bulk then the EMV of the storm…...

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