Uncertainty is the situation in which we do not know all the possible outcomes and, therefore, can't reasonably assign probability to outcomes. Uncertainty is the unknown factor(s) in decision making for managers. Per the Warfighting Manual of the U.S, Marines, Because we can never eliminate uncertainty, we must learn to fight (manage) effectively despite it. We do this by deploying simple, flexible plans; planning for likely contingencies; developing standing operating procedures; and fostering initiatives among subordinates." (See reference in the Welcome on this week's page.) Two entirely new teams have just joined the league. They will play each other. Someone will win, but who? (Beware of false probability, each team does not necessarily have an even chance of a win)

Assignment

Government support for the development of Covid-19 vaccines took two different forms. Some firms accepted grants (a.k.a, direct monetary support) for vaccine development and testing. As a condition of the grant, the government has options to purchase a first and specific number of vaccine doses. Other firms chose not to accept grants. Instead they negotiated advanced-purchase agreement to support pre-approval manufacturing of vaccines. The purchase agreement stipulates that payment will be made upon delivery of the pre-specified number of doses.

• Is the successful development and delivery of a vaccine for Covid-19 virus risky or an uncertainty?
• In the case of direct support agreements, who bears the cost of failure?
• In the case of advanced purchase agreements, who bears the cost of a failure?
• Pfizer was the first firm to have its vaccine authorized for use in the U.S. It did not accept a grant to support development and testing, but the Pfizer did negotiate an advance-purchase agreement for $1.95 billion to support the manufacturing of 100 million doses. Looking back, what hidden information is revealed by Pfizer's deal?