Sonoma Valley Wines

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Case: Sonoma Valley Wines

Question 1+2 Benchmark‐Model

t=1 How many bottles of Petite Sirah? How many bottles of Sauvignon Blanc? How many grapes in $? Advertisement expenses? Profit over two years? =totalValue‐investment Endogenous Variables sellP1 4.469,27 sellS1 6.703,91 produceP1 4.469,27 produceS1 6.703,91 produceP2 62.457,30 produceS2 26.767,41 Exogenous Variables investment 10000 priceP1 8 priceS1 7 priceP2 8,25 priceS2 7 priceAdP1 0,2 priceAdS1 0,125 priceAdP2 0,166666667 priceAdS2 0,1 priceGrapesP1 0,8 priceGrapesS1 0,7 priceGrapesP2 0,75 priceGrapesS2 0,85 Induced Variables sellP2 sellS2 excessProductionP1

=produceP1‐sellP1

4.469,27 6.703,91 $8.268,16 $1.731,84 $692.644,59

t=2 62.457,30 26.767,41 $69.595,27 $13.086,29

62.457,30

=excessProductionP1+produceP2

26.767,41

=excessProductionS1+produceS2

0 0

=produceS1‐sellS1

excessProductionS1 shareSellP1

=sellP1/(sellS1+sellP1)

0,4 0,7

=sellP2/(sellS2+sellP2)

shareSellP2

max

totalValue

=value1+value2

702644,59

investment

=investment

10000,00 82681,56

=sellP1*priceP1+sellS1*priceS1

+ revenue1 ‐ cost1 = value1

=investment+revenue1‐cost1

10000,00

=produceP1*priceGrapesP1+produceS1*priceGrapesS1+sellP1*priceAdP1+sellS1*priceAdS1

82681,56 702644,59

=(excessProductionP1+produceP2)*priceP2+(excessProductionS1+produceS2)*priceS2

revenue2 ‐ cost2

82681,56

=produceP2*priceGrapesP2+produceS2*priceGrapesS2+(excessProductionP1+produceP2)*priceAdP2 +(excessProductionS1+produceS2)*priceAdS2

= value2

=revenue2‐cost2

619963,02

1)

Cost of t=1 10000,00

=cost1

≤ ≤ ≤ ≤ ≥ ≥ ≤ ≤ ≥ ≥ ≤ ≤ ≥ ≥ ≥

Investment...