O'Reilly logo

The Art of Computer Modeling for Business Analytics by Gerald Feigin

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

CHAPTER 2

Assessing Risk and Opportunities of a Manufacturing Plant Expansion

Major strategic decisions for many companies are often fraught with uncertainty. If we build a new manufacturing plant, will demand for the products it produces be adequate to justify its construction? What might competitors do that would affect the outcome? Will our customers stay with us or will they find alternative suppliers? Will there be adequate supplies to feed the new factory? In these situations, we find ourselves coping with uncertainty, not risk, a distinction that the economist Frank Knight made in 1921.1 James Surowiecki characterized Knight’s distinction as follows:

Risk . . . is something you can calculate—the probability of someone losing at roulette. ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required