Product details

Avion is interested in a new valve to manage the highly volatile phenol in its production process. Avion and Orion strike a deal for Orion to try to produce these valves. There are time, engineering, and software constraints that make the valve-redesign project a risky endeavor. The A case consists of a basic decision tree that has been used as an introductory case in decision analysis and in the core material for an exam. The A case is a rewrite of two earlier cases. In those cases, the key issues surround the scheduling of the projects, leading to insights about which to schedule first. Here, the scheduling is fixed and the issues are less calculation-intensive and more interesting. In the A case, there are two options: one the students usually see and one they don't. The B case consists of a quick series of changes in the situation that leads to a totally different decision structure and requirement for simulation modeling (or some other technique to handle the introduction of continuous uncertainties). This case also has a wonderful real option embedded in the problem around which an entire class can be built. Because the estimate is continuous, the option problem becomes one of finding the optimal estimated-performance value at which one aborts the software redesign.