16.3.9 A Question Help What decisions should be made using the average payoff strategy in the three given situations? Click here to view information for a decision about relocating manufacturing. Click here to view information for a decision about rental car insurance. Click here to view information for a decision about ISO certification. one, so using the average payoff strategy, the company should For the manufacturing decision, the best payoff is the (Round to the nearest dollar as needed.) the manufacturing for wooden doors because that gives the best average payoff of $ x Manufacturing relocation information ISO certification information Rental car insurance information A company 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 net present value of profits over the next five years. A leading manufacturer of garage doors recently acquired another manufacturer and is considering moving its wood door operations to the acquired plant. Key considerations in this decision are the transportation, labor, and production costs at the two plants. Complicating matters is the fact that marketing is predicting a decline in the demand for wood doors. The company developed three scenarios: a. Demand falls slightly, with no noticeable effect on production. b. Demand and production decline 20%. c. Demand and production decline 40%. The following table shows the total costs under each decision and scenario. A car-rental agency offers insurance for a week that costs $75. A minor fender bender will cost $3,100, whereas a major accident might cost $17,000 in repairs. Without the insurance, you would be personally liable for any damages. Customer Response Required Not Required $500,000 $400,000 $450,000 $675,000 Print Done Become certified Stay uncertified Stay Move Slight Decline $980,000 $1,120,000 20% Decline $790.000 $960,000 40% Decline $830,000 $750,000 Print Done Print Done 16.3.9 A Question Help What decisions should be made using the average payoff strategy in the three given situations? Click here to view information for a decision about relocating manufacturing. Click here to view information for a decision about rental car insurance. Click here to view information for a decision about ISO certification. one, so using the average payoff strategy, the company should For the manufacturing decision, the best payoff is the (Round to the nearest dollar as needed.) the manufacturing for wooden doors because that gives the best average payoff of $ x Manufacturing relocation information ISO certification information Rental car insurance information A company 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 net present value of profits over the next five years. A leading manufacturer of garage doors recently acquired another manufacturer and is considering moving its wood door operations to the acquired plant. Key considerations in this decision are the transportation, labor, and production costs at the two plants. Complicating matters is the fact that marketing is predicting a decline in the demand for wood doors. The company developed three scenarios: a. Demand falls slightly, with no noticeable effect on production. b. Demand and production decline 20%. c. Demand and production decline 40%. The following table shows the total costs under each decision and scenario. A car-rental agency offers insurance for a week that costs $75. A minor fender bender will cost $3,100, whereas a major accident might cost $17,000 in repairs. Without the insurance, you would be personally liable for any damages. Customer Response Required Not Required $500,000 $400,000 $450,000 $675,000 Print Done Become certified Stay uncertified Stay Move Slight Decline $980,000 $1,120,000 20% Decline $790.000 $960,000 40% Decline $830,000 $750,000 Print Done Print Done