Solved by a verified expert :Unless otherwise indicated, all the sources listed below are
accessible via the Trident Online Library.
Where given, URLs were checked and validated on the dates shown. If you are citing an online source in an
assignment, you should enter the date that you consulted that source.
Sources marked with an asterisk (*) are a part of this
Course.
Feel free to browse the Web for additional sources.
Required Reading
*Rensvold, R. (2014c). Decision trees [course page].
Available on Module 2 home page in OPM300 Introduction to Operations Management
at Trident University International, 5757 Plaza Drive, Suite 100, Cypress, CA
90630.
Additional Reading
Bratvold, R. & Begg, S. (2010). Making good decisions (Chap. 5: Structuring and solving decision
problems). Richardson, TX: Society of Petroleum Engineers [Available in
the Trident ProQuest Ebrary].
Kautt, G. (2010).
Decision tree: Diagramming the
options in your professional life.
Financial Planning 40 (9) (no pagination).
Simon, J. (2000).
Developing decision-making skills for business (Part II: Introduction to evaluative thinking.) London:
M.E. Sharpe [Available in the Trident ProQuest Ebrary].
STOP! Have you read,
studied, and understood all of the course materials, including the Module Home
Page and the sources listed under Background Info? If you haven’t, then do so before attempting
this Case.
Resist the temptation to browse the Web, looking for
“clues.” There’s a lot of confusing
stuff out there, and much of it is irrelevant.
This Module contains all the information you need. Study it – use it!
Case Assignment
All land within the municipality of Springfield is zoned for
either agricultural, residential or commercial use. You have just purchased a parcel of
agricultural land for $20,000 in the expectation that it will be rezoned next
year. But the rezoning is controversial,
and will be decided by the full City Council rather than just the Zoning
Commission.
According to your inside sources, there’s a 30% chance the
land will be rezoned for commercial use; in that event, you’ll be able to sell
the land for $50,000. But the populists
on the Council are pushing for more affordable housing; if they win the vote,
which your sources think has a likelihood of 50%, then the land will be rezoned
for residential use, and you’ll only be able to sell it for $30,000. Of course, the Greens may win, and the land
won’t be rezoned at all. In that event,
it will still be worth what you paid for it, but no more than that.
You’ve just been approached by Mr. Hi Roller. He’s a land speculator like yourself, but he
doesn’t have your inside sources. He
thinks the land will be rezoned next year, and has offered you $30,000 cash for
it, right now.
Which alternative should you choose? Explain your decision process in detail.
Please read and heed the hints given in Case 1. The same general advice is applicable in this
Case, in particular:
1. Read the source
materials before beginning.
2. The Case is
about decision trees, not flipping real estate.
3. Follow standard
format. A cover page, a short
discussion, references and citations are all required.
