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  • MBA Case Study: Freemark Abbey Winery Harvest Decision

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    Amit Maheshwari
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    Freemark Abbey Winery is facing a harvest decision as a coming storm could damage their grape crop. The professor provides discussion questions about drawing a decision tree to analyze Jaeger's choices to bottle the current crop or sell the grapes in bulk. The questions also address how the optimal decision would change if reputation damage from a thin wine was substantial, and how much Jaeger would pay for a more accurate weather forecast to inform the harvest decision under risk preferences.

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    Freemark Abbey Winery is facing a harvest decision as a coming storm could damage their grape crop. The professor provides discussion questions about drawing a decision tree to analyze Jaeger's choices to bottle the current crop or sell the grapes in bulk. The questions also address how the optimal decision would change if reputation damage from a thin wine was substantial, and how much Jaeger would pay for a more accurate weather forecast to inform the harvest decision under risk preferences.

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    Download as DOC, PDF, TXT or read online from Scribd
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    79 views1 page

    MBA Case Study: Freemark Abbey Winery Harvest Decision

    Uploaded by

    Amit Maheshwari
    Freemark Abbey Winery is facing a harvest decision as a coming storm could damage their grape crop. The professor provides discussion questions about drawing a decision tree to analyze Jaeger's choices to bottle the current crop or sell the grapes in bulk. The questions also address how the optimal decision would change if reputation damage from a thin wine was substantial, and how much Jaeger would pay for a more accurate weather forecast to inform the harvest decision under risk preferences.

    Copyright:

    Attribution Non-Commercial (BY-NC)
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    MBA 201a

    Fall 2009Prof. Wolfram

    Case Preparation Discussion Questions: Freemark Abbey Winery Answer and be prepared to discuss the following questions: 1. Draw a decision tree to depict the choices and possible events Jaeger is facing. What are the decisions to be made? What are the chance nodes that will occur? What are the payoffs? (In drawing your tree, assume that Jaeger is an expected value maximizer, i.e. that he is risk-neutral.) 2. How would the optimal decision change if the reputation damage from bottling a thin wine were substantial enough that Jaeger would rather sell the grapes in bulk than bottle a thin wine? 3. How much would Jaeger be willing to pay for a weather forecast that would tell him with near certainty whether or not the storm will hit? 4. How would risk aversion affect the harvest decision?

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