For Office Use:

Grade

Communication for Managers

Case Assignment No. 1

Case Analysis Report on

“Freemark Abbey Winery”

Name: Yash S Shah

Roll No.: 181267
Section: B
Batch: MBA-FT (2018-2020)

Institute of Management, Nirma University

Date of Submission: 16th July 2018

Situational Analysis:

William Jaegar is a partner and owner of Freemark Abbey Winery. It is located in St. Helena,
California, in the Northern Valley. William has a dilemma that the Riesling crops should be harvest
immediately or wait for light rain/storm. Freemark produces 2500 cases of wine annually out of which
1000 cases of Riesling is produced equivalent to 12000 bottles per year. Wine is produced using
juices of grapes into alcohol and carbon dioxide through a fermentation process. Every choice
accompanies a specific level of risk. If he harvests now and avoids the rainstorm risk, then he would
get a decent amount of return. But if he waits for light rain there is 20% probability then he can triple
his returns. So there are various decisions involved and according to that cost is involved.

Problem Analysis:

As William Jaegar worried about reputation as well as revenue of the company, so he has to take the
decision wisely. This can be done by considering the all the possibility and the price associated with
it. There are the following possibilities like:

 If the harvest is done immediately, he can avoid risk of rainstorm. It would give decent type
of grape, the wholesale price for the wine would be $ 2.85.
 If the light rain hits then it would lead to the development of botrytis mould. It gives the
highest quality of grape, the wholesale price for Botrytised Riesling wine would be sold $8,
which gives three times more revenue than immediate harvesting. But the probability for light
rain is just 40% and also the quantity efficiency will be 70%.
 If the mould is not formed properly than roots of vines would absorbed the rainwater. Results
would be degrades in quality of wine due to oversaturating of grapes.
 If the acidity drops below 0.7%, then grapes must be harvested at whatever the sugar level
would be. The wholesale price would be $2.50 per bottle.
 If due to bad luck there is no rain, there will be 3 possibilities depending on the concentration
of sugar in grapes:
1. If the sugar level is 25%, resulting in wine selling for around $3.50 wholesale.
2. If the sugar level is 20%, resulting in wine selling for around $3.00 wholesale. It is
less likely to happen.
3. If the concentration of sugar is 19%, then wholesale price would be $2.50 per bottle.

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Decision Making

1. Harvest before a storm 12000 * $ 2.85 $ 34200

arrives
2. No rainstorm 12000 * $ 3.5 * 0.5 $ 21000
probability will be
50%, 25% sugar level
3. No rainstorm 12000 * $ 3.0 * 0.5 $ 18000
probability will be
50%, 20% sugar level
4. No rainstorm 12000 * $ 2.5 * 0.5 $ 15000
probability will be
50%, 25% sugar level
5. If the mould formation 12000 * $ 8 * 0.2 * 0.7 $ 13440
occurs then probability
will be 0.2, the quantity
will be reduced by 30%
6. If no mould formation 12000 * $ 2 $ 24000
occurs

Analysing all the possible outcomes considering with probabilities, the best option is to Harvest
before a storm arrives. So the revenue will be maximized and also the reputation will be taken care
of.

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 Undertaking

To whom it may Concern:

I, Yash S Shah hereby declare that this assignment is my original work and is not
copied from anyone/anywhere. If found similar to other sources, shall take complete
responsibility of the action, taken thereof by, CFM Team.

Signature: ________________________________

Name: ___________________________________

Roll no.: __________________

Section: ______

Batch: MBA – FT (2018-2020)

Date: ____________________

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