Business Case Studies & Business Publications

Salmones Puyuhuapi Part I

Bodily, Samuel E.,...

Case

Salmones Puyuhuapi Part I

Bodily, Samuel E.; Echeverria, Rafael; Pfeifer, Phillip E.

QA-0776 | Published September 14, 2011 | 10 pages Case

Collection: Darden School of Business

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This case series is appropriate for undergraduate, MBA, executive education, and MBA Exec audiences but is specifically designed for decision analysis, a first-year MBA core course. In the Part I case, Osvaldo Correa, CEO of Salmones Puyuhuapi (SP), must decide how to respond to news that the ISA virus has infected a competitor's salmon farming site. The alternatives include harvesting SP's 900,000 salmon two months early, waiting for the fish to grow and risk losing fish to the virus, and vaccinating the fish. The "harvest now" alternative is evaluated using normally distributed fish weights. It is necessary to account for monthly growth of the fish and mortality to value the ends of the decision tree. Other alternatives (e.g., testing the water, fish, and marine life) can be studied with the expected value of perfect information. Vaccination is an example of the value of perfect control.