A factory is trying to decide how much pollution they should allow to be released by their
Question:
A factory is trying to decide how much pollution they should allow to be released by their plant. They have two options: they can either implement new filtering system s to decrease pollution , or they can boost production without any filtering, significantly increasing pollution. It will cost them $3 million to implement the new filtering system. A careful market analysis reveals that there is a 70% chance that the industry will fall under a new "green" initiative . If this happens , and they have implemented new filtering systems , they can expect their profit to increase by $5 million. if they implement the new filtering system and the green initiative doesn't take off , then their profits will likely stay the same, though they will have still have paid for the filters. Alternatively , if they increase production without changing the factor at all, then they figure they will be able to increase their profits by $8 million without changing the cost of production. however , if the green initiative takes off , they will be subject to increase EPA inspections , and they will be fined $15 million.
a. Construct a decision table to model this decision
b. Construct a decision tree to model this decision
c. what should the factory do?
Managing Business Ethics Making Ethical Decisions
ISBN: 9781506388595
1st Edition
Authors: Alfred A. Marcus, Timothy J. Hargrave