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    Shankar Subramanian
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    Freemark Abbey Winery had to decide whether to harvest their Riesling grapes immediately or leave them on the vines despite an approaching storm. Leaving the grapes could result in a beneficial mold called botrytis cinerea forming and producing a higher quality, more valuable wine. However, there was also a risk the storm could damage the crops. A decision tree analysis showed harvesting before the storm would yield $2.85 per bottle on average, while waiting for potential botrytis would yield $3.27 per bottle if successful but only $1 per bottle if sold wholesale if botrytis did not form. Based on the analysis, it was recommended to not harvest and take the risk of waiting for potential higher returns

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    Free Mark Abbey winery case study

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    Freemark Abbey Winery had to decide whether to harvest their Riesling grapes immediately or leave them on the vines despite an approaching storm. Leaving the grapes could result in a beneficial mold called botrytis cinerea forming and producing a higher quality, more valuable wine. However, there was also a risk the storm could damage the crops. A decision tree analysis showed harvesting before the storm would yield $2.85 per bottle on average, while waiting for potential botrytis would yield $3.27 per bottle if successful but only $1 per bottle if sold wholesale if botrytis did not form. Based on the analysis, it was recommended to not harvest and take the risk of waiting for potential higher returns

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    942 views5 pages

    Freemark Abbey Winery

    Uploaded by

    Shankar Subramanian
    Freemark Abbey Winery had to decide whether to harvest their Riesling grapes immediately or leave them on the vines despite an approaching storm. Leaving the grapes could result in a beneficial mold called botrytis cinerea forming and producing a higher quality, more valuable wine. However, there was also a risk the storm could damage the crops. A decision tree analysis showed harvesting before the storm would yield $2.85 per bottle on average, while waiting for potential botrytis would yield $3.27 per bottle if successful but only $1 per bottle if sold wholesale if botrytis did not form. Based on the analysis, it was recommended to not harvest and take the risk of waiting for potential higher returns

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 5

    Freemark Abbey Winery

    We make the best wine from Botrytis cinerea California

    Sep 1976

    Problem Statement
    Freemark Abbey Winery, had to make a decision based on an upcoming storm risk to harvest Riesling grapes
    Harvest Leave

    grapes immediately, or

    them on the vines despite the approaching

    storm
    A A

    storm just before the harvest is usually detrimental, often ruining the crop. warm, light rain, however, will sometimes cause a beneficial mold, botrytis cinerea, to form on the grape skins resulting in a superior quality grapes

    Approach & Key Options

    The Winery has following options to consider

    Take a risk of not harvesting expecting a light warm rain to help create a connoisseurs wine of highest quality Harvest now and take a more cautious approach

    A detailed decision making tree analysis was performed (See detailed in next slide). Based on the same, find below key options for consideration:

    Harvesting before storm will give an expected return of $2.85/Bottle Waiting for the light rain will give an expected return of $3.27/Bottle Wholesale grapes (de-risking reputation) will yield $1/Bottle

    Decision Tree
    Sell gra pes a s is FALSE 1.425 Bottle FALSE Bottling or no bottling 2.85 Sell in Bulk Ha rves t/No Ha rves t 3.27 Botryis Mold 50.0% 0 Ra in pos s ibility 3.44 Bottle TRUE 2 30.0% 2 0.0% 1 40.0% 5.6 20.0% 5.6 FALSE 1.425 0.0% 1.425 TRUE 2.85 0.0% 1.425 0.0% 2.85

    Ha rves t

    Strom

    No Bottle
    60.0% Ha rves t 2

    FALSE 1

    No Botryis Mold

    Sell gra pes a s is


    TRUE Strom 3.27 Bottle

    FALSE 1

    0.0% 1

    No Ha rves t

    TRUE 2.5

    10.0% 2.5 0.0% 1.25

    No Bottle 20.0% 0 Ha rves t 2.5 Sell gra pes a s is 50.0% 0 Cha nce 3.1

    FALSE 1.25

    Acidity < .7%

    FALSE 1.25

    0.0% 1.25

    No Strom

    25% s uga r level


    80.0% 0 Suga r Level 3.25

    50.0% 3.5

    20.0% 3.5

    Acidity >.7%

    20% s uga r level

    50.0% 3

    20.0% 3

    Recommendation
    Reviewing the risk, rewards and reputation of the winery recommend
    Don't

    harvest at this point in face of approaching storm

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