Case Study: Uncertainty [WLOs: 1, 2, 3, 4] [CLOs: 1,

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Case Study: Uncertainty

[WLOs: 1, 2, 3, 4] [CLOs: 1, 2, 3, 5]

Prior to beginning work on this assignment, review Chapter 6: Decision Making Under Uncertainty.

Read Case 6.4, “Developing a Helicopter Component for the ARMY” in your course text.

For Part 1 of this assignment, using an Excel spreadsheet,

  • Develop a decision tree to maximize Ventron’s expected monetary value (EMV).
    • This includes the revenue from this project, the side benefits (if applicable) from an improved extrusion process, and relevant costs.
    • You don’t need to worry about time value of money; that is, no discounting or net present values are required.
  • Summarize your findings in words in the spreadsheet.

For Part 2 of this assignment, in a one to two page paper,

  • Determine what value of side benefits would make Ventron indifferent between the two alternatives.
  • Evaluate how much Ventron would be willing to pay, right now, for perfect information about both steps of the improved extrusion process.

The Case Study: Uncertainty paper

Carefully review the Grading Rubric (Links to an external site.) for the criteria that will be used to evaluate your assignment.

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