RESEARCH AND DEVELOPMENT AT ICI Harvard Case Solution & Analysis

RESEARCH AND DEVELOPMENT AT ICI Case Study Help

Analysis:

For the purpose to analyze the synthesize Anthaquinone(AQ) process, the decision tree diagram has been developed,which is presented in the research and development excel file. In decision tree diagram, the two ranges of NPV have been picked, which are: 25 million dollars plus minus 50 percent of variation that is in between 12.5 million dollars to 37.5 million dollars. Furthermore, the respected figures of expenses (research expense to find a new process, process development expense, preliminary market development, preliminary commercial development and additional commercial development) are used with the help of their plus minus variations, along with the plus minus variations of their probabilities.

Recommendations:

As it is shown in the decision tree analysis in the excel file with the name of research and development at ICI;the final NPV after the final commercial success ranges between the 5.938 million dollars to 34.238 million dollars. As the final NPV for the development of AQ process in the company in order to reduce the pollution in the form of carbon emission in the effluent of a pulp mill, the final commercial success ranges are in positive that will definitely increase the shareholder wealth between the 5.938 million dollars to 34.238 million dollars. So, the process should be pursued in the company.....................

 

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