Task III 20 points John had just had lunch with Lucy when they met with Arnold Smith outside Lucy's office. It is fair to say that Arnold was not in a good mood and uttered that he had lost half a dozen golf balls during a game with Harold the other day. "Whatever you do don't let Harold make assessments of investments himself as from now on he said" However Arnold had other issues on his mind as the foundations of the company might be in jeopardy! "We have a major challenge ahead of us and need to meet and discuss what to do." Later that day Lucy and John was invited to a meeting with Arnold at the centre for meteorological research outside London. They met with the head of research Nolan Hunt as well with an expert on energy prices, Amy Strongbow. Arnold started of presenting some thoughts about the instability when it comes to prices on electricity. According to earlier analysis's the threshold for what the company can afford is 0,042 per kWh (kilo wat hour). Until now that has been the case but recently the volatility when it comes to energy prices has increased and it is time to come up with a balanced approach. Amy Strongbow continued with her predictions of prices and then connected to weather patters that now strongly affects the production of electricity from wind farms as well as having an impact on pricing from traditional sources of energy. Nolan followed Amy with his assement of probabilities for three weather patterns; windy, normal and calm. After some deliberations Amy and Nolan came up with the following analyse of probabilities and energy prices split into traditional and renewable sources. Windy Normal Calm Traditional Renewable Probability Price Price 30% 0,050 0,025 45% 0,040 0,040 25% 0,030 0,070 Arnold, Lucy and John agreed that this looked worrying. They agreed that the company urgently need to find out which of the sources is preferable to use or maybe a combination of both. You need to help them to find a balanced approach and a suggestion for how to go forward. Task III 20 points John had just had lunch with Lucy when they met with Arnold Smith outside Lucy's office. It is fair to say that Arnold was not in a good mood and uttered that he had lost half a dozen golf balls during a game with Harold the other day. "Whatever you do don't let Harold make assessments of investments himself as from now on he said" However Arnold had other issues on his mind as the foundations of the company might be in jeopardy! "We have a major challenge ahead of us and need to meet and discuss what to do." Later that day Lucy and John was invited to a meeting with Arnold at the centre for meteorological research outside London. They met with the head of research Nolan Hunt as well with an expert on energy prices, Amy Strongbow. Arnold started of presenting some thoughts about the instability when it comes to prices on electricity. According to earlier analysis's the threshold for what the company can afford is 0,042 per kWh (kilo wat hour). Until now that has been the case but recently the volatility when it comes to energy prices has increased and it is time to come up with a balanced approach. Amy Strongbow continued with her predictions of prices and then connected to weather patters that now strongly affects the production of electricity from wind farms as well as having an impact on pricing from traditional sources of energy. Nolan followed Amy with his assement of probabilities for three weather patterns; windy, normal and calm. After some deliberations Amy and Nolan came up with the following analyse of probabilities and energy prices split into traditional and renewable sources. Windy Normal Calm Traditional Renewable Probability Price Price 30% 0,050 0,025 45% 0,040 0,040 25% 0,030 0,070 Arnold, Lucy and John agreed that this looked worrying. They agreed that the company urgently need to find out which of the sources is preferable to use or maybe a combination of both. You need to help them to find a balanced approach and a suggestion for how to go forward