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Fitch%20-%20Class5%20F10-%20Freemark%20Abbey

Fitch%20-%20Class5%20F10-%20Freemark%20Abbey - Slide 1 Fall...

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Fall 2010 UGBA101A-03 Microeconomic Analysis for Business Decisions Class 5 Prof. Todd Fitch
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Agenda Wheat Prices & Rioting Freemark Abbey Decision Analysis
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Decision Node Harvest No harvest Rain Chance Node Botrytis No botrytis Bottle Sell in bulk The Final Decision Tree Chance Node No rain Decision Node Sell grapes Decision Node Harvest No harvest Chance Node Low acid 25 % Sugar 20% Sugar
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Decision Node Harvest No harvest Rain Chance Node Botrytis No botrytis Bottle Sell in bulk The Final Decision Tree + Values 1000*12*2.85 = 34200 700*12*8 = 67200 1000*12*2 = 24000 24000 / 2 = 12000 Chance Node No rain Decision Node Sell grapes Decision Node Harvest No harvest Chance Node Low acid 25 % Sugar 20% Sugar 1000*12*3.5 = 42000 1000*12*3 = 36000 1000*12*2.5 = 30000 24000 / 2 = 12000 1000*12*2.85 = 34200
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Decision Node Harvest No harvest Rain Chance Node Botrytis No botrytis Bottle Sell in bulk The Final Decision Tree + Values + Probabilties 1000*12*2.85 = 34200 700*12*8 = 67200 1000*12*2 = 24000 24000 / 2 = 12000 50% 40% 60% Chance Node No rain Decision Node Sell grapes Decision Node Harvest No harvest Chance Node Low acid 25 % Sugar 20% Sugar 1000*12*3.5 = 42000 1000*12*3 = 36000 1000*12*2.5 = 30000 24000 / 2 = 12000 1000*12*2.85 = 34200 50% 40% 40% 20%
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