Management Science – Workshop 2: Case Study Recreational Properties 1. 1. Framing the Decision 2. Recreational Properties obtained a package of options to acquire three parcels that would allow them to develop a ski resort. The company paid €500‚000 for the package of options in June 2001. The options gave the company the right‚ but not the obligation‚ to acquire the three parcels at a (strike) price of €10 million in June 2002. 3. Furthermore‚ in order to develop the three parcels
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Questions for the Merck Case Create a decision tree for Merck. The 2 leftmost branches would identify the alternatives related to licensing Davarink (specifically license versus not to license). Next‚ if Merck decides to pursue license‚ they go into phase I which results in a success‚ or failure. Phase I success is followed by phase II where Merck has the opportunity to develop the drug to treat depression alone‚ weight loss alone‚ or both‚ or contemplate phase II failure. Finally phase
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tax present values discounted to time zero‚ including capital expenditures At any point "failure‚" investment decision is to stop funding Assuming Standard deviation of 0.5 Using T= 7 years in Black-Scholes Valuation 2 Decision Tree See worksheet "Decision Tree" 3 Detailed description of Real Option Technique "First‚ using a decision tree‚ I came up with a simple expected value of $13‚980‚000 based on the costs to complete each phase‚ the probabilities
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Recently the organization was accosted by Kappa Labs with a proposal to purchase the product KL-798. This drug is associated with obesity and weight-loss which is becoming a valuable investment to the pharmaceutical industry. The initial decision Merck must make is whether to purchase the drug rights of the KL-798 product. It will initially cost $30 million up front and an additional $5 million to complete phase one. Disregarding Mr. Merck’s philosophy‚ the program suggests to not invest
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BUAD820 – Case 2 Merck Case Decision Tree and Analysis Presented By – Sridevi Chennuri Nuray Coban Subhashini Reddy Merck & Company :Evaluating a Drug Licensing Opportunity • Background - Merck & Company : •In 2000‚ it was a global research-driven pharmaceutical company that discovers‚ develop‚ manufactures and markets a broad range of human and animal health products‚ directly and through its joint ventures‚ and provides pharmaceutical benefit management services through Merck-Medco Managed Care
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MS&E 252 Decision Analysis I Handout #16 November 8th‚ 2007 Case Study Due: Friday November 30th‚ 2007 The case study will give you practice applying the concepts you are learning in MS&E 252. . You are from the XYZ consulting company (you can create your own name). William Jaeger of Freemark Abbey Winery has hired your company to help him make a production decision. A storm is approaching the winery and Jaeger is not sure if he should wait for the storm or harvest the grapes immediately
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Abstract This case study examines the decision making process of the Kowloon Development Company to the PrecisionTree decision tree software from Palisade. The Kowloon Development Company was faced with a major decision about their future investments. The General Manager of the Kowloon Development Company is usually involved in billion dollar investments‚ accurate decisions are needed. The company has to make a decision over the decision to purchase a new development project the total site area
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edu/ml/datasets/Tic-Tac-Toe+Endgame]. Irvine‚ CA: University of California‚ School of Information and Computer Science. http://en.wikipedia.org/wiki/Tic-tac-toe http://www.infoacumen.com/ http://www.kdnuggets.com/software/classification-decision-tree.html#tree-free o http://www.geocities.com/adotsaha/CTree/CtreeinExcel.html o http://www.tetris1d.org/zigah/mangrove/ Data Mining – A tutorial based primer‚ Richard J. Riger and Michael W. Geatz‚ Second impression 2008‚ Pearson Education Inc.
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Avalanche Corporation Decision Analysis and Strategic Recommendation Table of Contents Table of Contents 1 Overview 2 Question 1: Production Strategy 2 Question 2: Sensitivity Analysis 3 Question 3: Influence of Outside Vendor 5 Question 4: Alternative Risk Profiles 6 Question 5: Are Fantastic Forecasters Worth It? 7 Conclusions 7 Appendix 8 Figure A: Precision Tree (Question 1) 8 Figure B: Cost Calculation Table 9 Figure C: Profit Calculation Table 9 Figure D: Tornado
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Expected Value of Perfect Information (EVPI) In decision-making under risk ‚ each state of nature is associated with probability of its occurrence ; If the decision-maker can acquire perfect (complete) information about the occurrence of various states of nature ‚ he will be able to select a strategy that yields the desired pay-off for whatever state of nature that actually occurs EMV /EOL criterion helps the decision-maker select a strategy that optimises the expected pay-off without
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