Question: Slaggert Systems is considering becoming certified to the ISO 9000 series of quality standards. Becoming certified is expensive, but the company could lose a substantial

Slaggert Systems is considering becoming certified to the ISO 9000 series of quality standards. Becoming certified is expensive, but the company could lose a substantial amount of business if its major customers suddenly demand ISO certification and the company does not have it. At a management retreat, the senior executives of the firm developed the following lowing payoff table, indicating the Net present value of profit over the Next 5 years.

What decision should the company make using each strategy?
a. aggressive strategy
b. conservative strategy
c. opportunity loss strategy

Customer Response Standards Standards Required Not Required Become certified $575,000 $500,000 Stay uncertified $450,000 $600,000

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