A final decision analysis project/assignment is required for the course using the material presented in
class, supplemented by course lectures, in-class discussions, and your professional experience. The paper
must reflect your analysis of the chosen business issue. You must provide a convincing argument for your
choice of the decision approach, alternatives, and solution. The paper and presentation must identify the
business issue, analyze the issues in the context of the course materials, and propose an appropriate
intervention to address it.
The paper should be of three pages (five pages maximum) of text. Supporting documentation, such as decision
tree, graphics, and spreadsheets must be presented

The following outline is suggested for the final paper and/or presentation:
? Problem Statement: Define the decision problem and analysis approach.
? Decision-making model: Describe the process and elements used to analysis the problem.
? Decision Alternatives: Identify possible alternative solutions to the problem and the possible outcomes
that might result to each alternative.
? Values Analysis: Describe the (decision makers) preferred alternatives (top three) to the problem.
? Data Collection and Evaluation Process: Discuss how the data are collected, and the alternatives evaluated
and compared.
? Conclusion: Summarize how you reduced complex alternatives with multiple consequences to your preferred
solution.
? Attachments: Analysis Calculation, Sensitivity Analysis, decision tree diagrams, spreadsheets, etc.

1) Introduction

2) Product profitability analysis: Kay would like to be able to better assign costs to each of AVS’s products, and has collected the following information about AVS activities.

• Harvesting activity – The Chardonnay grapes can be harvested at the average rate of 71.5 pounds/hour, while the generic white grapes are harvested at the rate of 100 pounds/hour. Harvesting includes costs related to tractors and harvest labor.
• Crush activity – Relates to the pounds of grapes crushed. Includes costs of crusher equipment and crush labor.
• Fermenting activities – Barrel costs relate to the Chardonnay wines by the percentage of wine used in each wine type. Holding tanks relate to the Blanc de Blanc and the regular Chardonnay wines by the percentage of wine used in each wine type.
• Lab and supervision activities – Albert estimates that these activities are split 60% Chardonnay-Estate, 25% regular Chardonnay, and 15% Blanc de Blanc.
• Other production activities and costs not directly associated with a specific wine – Allocate according to the number of bottles produced of each wine.
• Administrative activities – Allocate according to sales revenues.

a. Use this information, along with the information given in the case, to construct a product profitability analysis. Assume that AVS did not buy the grapes referred to in Question 2.

b. What would you recommend to Kay Aproveche regarding the product profitability analysis?