Please Help I really dont know how to start this case study hope somebody will clear this :

MANAGERIAL REPORT

Perform an analysis of the problem facing the Oceanview Development Corp. and prepare a report that summarizes your findings and reccomendations

1. Decision Tree (logical sequence of the problem)

2. A recommendation regarding what Oceanview should do if the market research information is not available.

3. A decision starategy that Oceanview should follow if the market research is conducted

4. A recommendation as wether Oceanview should employ the market research firm, along with the value of information provided by the market research firm. Include detsils of your analysis as an appendix to your report.

Case Problem:

Glenn Foreman, president of Oceanview Development Corporation, is considering submitting a bid to purchase property that will be sold by sealed bid at a county tax foreclosure. Glenns initial judgment is to submit a bid of $5 million. Based on his experience, Glenn estimates that a bid of $5 million will have a 0.2 probability of being the highest bid and securing the property for Oceanview. The current date is June 1. Sealed bids for the property must be submitted by August 15. The winning bid will be announced on September 1.

If the Oceanview submits the highest bid and obtains the property, the firm plans to build and sell a complex of luxury condominiums. However, a complicating factor is that the property is currently zoned for the single-family residences only. Glenn believes that a referendum could be placed on the voting ballot in time for November election. Passage of referendum would change the zoning of the property and permit construction of the condominiums.

The sealed bid procedure requires the bid to be submitted with a certified check for 10% of the amount bid. If the bid is rejected, the deposit is refunded, if the bid is accepted, the deposit is the down payment for the property. However, if the bid is accepted and the bidder does not follow through with the purchase and meet the remainder of the financial obligation within 6 months, the deposit will be forfeited, in this case, the county will offer the property to the next highest bidder.

To determine whether Oceanview should submit the $5 million bid Glenn has done some preliminary analysis. This preliminary work provided an estimate of 0.3 for the probability that the referendum for a zoning change will be approved and resulted in the following estimates of costs and revenue that will be incurred if the condominiums are built.

Cost and Revenue Estimates

Revenue from condominium sales cost $20,000,000

Property $5,000,000

Construction Expenses $10,000,000

If Oceanview obtains the property and the zoning change is rejected in November, Glenn believes that the best option would be for the firm not to complete the purchase of the property. In this case, Oceanview would forfeit the 10% deposit that accompanied the bid.

Because the likelihood that the zoning referendum will be approved is such an important factor the decision process, Glenn suggested that the firm hire a market research service to conduct a survey of voters. The survey would provide a better estimate of the likelihood that the referendum for zoning change would be approved. The market research firm that Oceanview Development has work with in the past has agreed to do the study for $15,000. The results of the study will be available August 1, so that the Oceanview will have this information before the August 15 bid deadline. The results of the survey will be either a prediction that the zoning change will be approved or rejected.After considering the record of the market research service I previous studies conductd for Oceanview, Glenn developed the following probability estimates concerning the accuracy of the market research information.

P(A/S1)=0.9 P(N/S1)=0.1 where A= prediction of zoning changes approval

P(A/S2)=0.2 P(N/S2)=0.8 N= prediction that zoning change will not approved

S1= The zoning change is approved by voters

S2= The zoning change is rejected by voters