35 20 SS 15 CHAPTER 3. DECISION ANALYSIS The heart of the system is the master control box. This unit, TABLE 3.15 Success Figures for MAI which would have a retail price of $250, has two rows of five buttons. Each button controls one light or appliance and can be SURVEY RESULTS set as either a switch or a rheostat. When set as a switch, a light finger touch on the button either turns a light or appliance on or OUTCOME FAVORABLE UNFAVORABLE TOTAL off. When set as a rheostat, a finger touching the button controls Successful the intensity of the light. Leaving your finger on the button venture makes the light go through a complete cycle ranging from off to Unsuccessful bright and back to off again. venture 30 45 To allow for maximum flexibility, each master control box is powered by two D-sized batteries that can last up to a year, depending on usage. In addition, the research team has devel- for additional marketing research to 30 marketing research oped three versions of the master control box-versions A, B, companies in southern California. and C. If a family wants to control more than 10 lights or appli- The first RFP to come back was from a small company ances, another master control box can be purchased. called Marketing Associates, Inc. (MAI), which would charge The lightbulb disk, which would have a retail price of $100,000 for the survey. According to its proposal, MAI has been in business for about three years and has conducted about $2.50, is controlled by the master control box and is used to control the intensity of any light. A different disk is available 100 marketing research projects. Mal's major strengths ap- peared to be individual attention to each account, experienced for each button position for all three master control boxes. By inserting the lightbulb disk between the lightbulb and the staff, and fast work. Steve was particularly interested in one part socket, the appropriate button on the master control box can of the proposal, which revealed MAI's success record with pre- vious accounts. This is shown in Table 3.15. completely control the intensity of the light. If a standard light The only other proposal to be returned was by a branch switch is used, it must be on at all times for the master control office of Iverstine and Walker, one of the largest marketing box to work One disadvantage of using a standard light switch is that research firms in the country. The cost for a complete survey only the master control box can be used to control the particular would be $300,000. While the proposal did not contain the same success record as MAI, the proposal from Iverstine and light. To avoid this problem, the research team developed a spe- cial light switch adapter that would sell for $15. When this de- Walker did contain some interesting information. The chance of vice is installed, either the master control box or the light switch getting a favorable survey result, given a successful venture, adapter can be used to control the light. was 90%. On the other hand, the chance of getting an unfavor- When used to control appliances other than lights, the mas- able survey result, given an unsuccessful venture, was 80%. ter control box must be used in conjunction with one or more Thus, it appeared to Steve that Iverstine and Walker would be outlet adapters. The adapters are plugged into a standard wall out- able to predict the success or failure of the master control boxes let, and the appliance is then plugged into the adapter. Each outlet with a great amount of certainty Steve pondered the situation. Unfortunately, both market- adapter has a switch on top that allows the appliance to be con- trolled from the master control box or the outlet adapter. The ing research teams gave different types of information in their price of each outlet adapter would be $25. proposals, Steve concluded that there would be no way that the The research team estimated that it would cost $500,000 two proposals could be compared unless he got additional infor- mation from Iverstine and Walker. Furthermore, Steve wasn't to develop the equipment and procedures needed to manufac- ture the master control box and accessories. If successful, this sure what he would do with the information, and if it would be venture could increase sales by approximately $2 million. But worth the expense of hiring one of the marketing research firms. will the master control boxes be a successful venture? With a 60% chance of success estimated by the research team. Steve Discussion Questions had serious doubts about trying to market the master control 1. Does Steve need additional information from Iverstine boxes even though he liked the basic idea. Because of his reser- and Walker? vations, Steve decided to send requests for proposals (RFPs) 2. What would you recommend