VALUING LIMITED INFORMATION IN DECISION MAKING UNDER UNCERTAINTY

Allan W. Gray, Joshua D. Detre and Brian Briggeman

No 28676, Staff Papers from Purdue University, Department of Agricultural Economics

Abstract: Fresh Juice Inc. (FJI) is in the process of determining whether they should launch a new fruit juice in a market that has been relatively stagnant for the last 15 years. Management of FJI is faced with uncertainty surrounding market share, market size, price, and competitor entry. In addition, FJI has the ability to chose between alternative production processes; this choice directly affects the likelihood the investment will return a positive Net Present Value. This case teaches students how to develop a stochastic simulation models given limited information to analyze risk investment decisions

Keywords: Risk; and; Uncertainty (search for similar items in EconPapers)
Pages: 14
Date: 2005
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Working Paper: Valuing Limited Information in Decision Making Under Uncertainty (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:puaesp:28676

DOI: 10.22004/ag.econ.28676

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