Valuing Limited Information in Decision Making Under Uncertainty

Allan Gray (), Joshua Detre and Brian Briggeman

No 05-02, Working Papers from Purdue University, College of Agriculture, 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: : simulation; uncertainty; strategic management; flexibility; limited information; investment analysis (search for similar items in EconPapers)
JEL-codes: C15 D24 D81 D83 D84 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2005-04
New Economics Papers: this item is included in nep-agr and nep-cse
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://ageconsearch.umn.edu/bitstream/28676/1/sp050002.pdf (application/pdf)

Related works:
Working Paper: VALUING LIMITED INFORMATION IN DECISION MAKING UNDER UNCERTAINTY (2005)
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