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Dharwar Drilling Society

Dharwar Drilling Society(DDS) As part of Dharwar Drilling Society’s objective to motivate more farmers to mortgage their land and take the risk of drilling to stuck water for irrigation and hence make them self- reliant, we need to consider the following to structure our problem and find out the best possible alternative:- Decision Makers The case brings out three major decision makers who influence the decision making process and hence the outcomes/ •Farmers-The farmers will decide whether they want to take the risk of mortgaging their land and go for the drilling process. Society-It’s the decision of the society to fix the basic minimum payable by each farmer and the depth at which a well is declared fail. Moreover the society will decide whether to continue drilling, in case water is not stuck at or before the fixed minimum depth. The society will also decide the additional amount per foot drilled payable by the farmers who own a successful drilled well. •Government-The state government will decide the amount of subsidy offered to the farmers for an unsuccessful drilled well. Decision Points/Variables We can identify the various decision points/variables with the help of a decision tree.

The decision tree below shows the various decision points and the corresponding pay-offs. The probability of every event taking place has been mentioned with the flow of decision making process. Analyzing the various stages of the decision tree can help us identify various decision variables and their relative importance for the success of this project. The various decision variables that can be identified are listed below:- •m-the minimum basic amount payable by each farmer •a-the additional amount per foot drilled payable by farmers owing successful well. p-the percentage of subsidy offered by the government for failed well(fixed in this case). •d-the depth at which a drill is declared successful(fixed in this case) Uncontrollable Outcomes The success or failure of a drill is more or less uncontrollable. Recommendations based on soil indications and geophysical surveys can help identify areas of more probable successful drills but it does not guarantee success. Implications of geophysical survey If we consider conducting geophysical survey the amount of pay-offs and the number of successful wells can be calculated as below:- Number of wells to be drilled- 1000 (assumption)

Number of wells recommended for drill- 70% i. e 700 Number of successful drills- 80% i. e 560. Pay-offs- In case of every successful drills- Rs. [490*560+(x*50)] In case of every unsuccessful drill- Rs [490*140+(y*50)] x is the depth drilled till water was stuck. y is the depth drilled till the well is declared unsuccessful. We can then calculate the amount to be paid by the unsuccessful farmers. Now, for the previous case we can calculate the pay-off and the number of successful wells as below:- Number of wells to be drilled-1000(assumption)

Number of successful drills-600+ 24=624. Pay-offs-In case of successful drill- Rs [200*50*600+250*50*24] In case of unsuccessful drill-Rs[200*50*a+250*50*b] a is the number of unsuccessful drills. b is the number of unsuccessful drills out of those chosen for continued drilling after 200 feet. As we can see, in case of a geophysical survey, the number of successful drills are less, but the amount payable by unsuccessful farmers is comparatively low. In the first case, the number of successful drills are more but the amount payable by unsuccessful farmers is high.

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