Question: 6. Slaggert Systems is considering becoming certified to the ISO 9000 series of quality standards. Becoming certified is expensive, but the company could lose a
6. 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 payoff table, indicating the NPV of profits over the next five years. What decision should they make under the average payoff, aggressive, conservative, and opportunity loss decision strategies?
Customer Response Standards Required Standards Not Required Become certified $600,000 $475,000 Stay uncertified $325,000 $525,000
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