the Industrial Cemicals Division of

the Industrial Cemicals Division of P&G is a major supplier of fatty alcohols derived from natural substances such as coconut oil and from petroleum-based derivatives. The division wanted to know the economic risks and opportunities of expanding its fatty-alcohol production facilities, and P&G's experts in probabilistic decision and risk analysis were called in to help. After structuring and modeling the problem, it was determined that the key to profitability was the cost difference between the petroleum- and coconut-based raw materials. Future costs were unknown, but the analysis were able to represent them with the following continuous random variables.