Have different requirements for this essay?
Order custom essay
Total Price
$ 0.00

Freemark Abbey Winery Case Solution

Case ID: 181027
Solution ID: 7670

Words: 1426

Price: $75

Case Solution

Free check Abbey must choose whether to reap in perspective of the likelihood of downpour. Downpour could harm the yield however postponing the harvest would be hazardous. Then again, rain could be useful and significantly build the estimation of the subsequent wine. This choice is further confounded by the way that ready Riesling grapes can be vinified in two routes, bringing about two distinct styles of wine. Their relative costs would rely on upon the dubious inclination of buyers two years after the fact, when the wine is packaged and sold.

Excel Calculations

Expected Payoffs

All Payoffs

Questions Covered

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.)

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?

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?

How would risk aversion affect the harvest decision?