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.