Part I. Decision Making

In the reading this week, youve learned about a variety of management decisions including:

• Make vs. buy (outsourcing)
• Accepting a special order
• Sell as-is or process further
• Keep or discontinue a product or operating segment
• Product mix when there are capacity constraints
• Keep or drop an existing customer

Part I Requirements:

Select two of the decision types listed above. For each selected decision type:

• Create a hypothetical situation in which management is faced with this decision type.
• Explain the circumstances including both quantitative and qualitative factors which will be considered.
• Evaluate relevant costs including differential costs, avoidable costs, and opportunity costs.
• Identify irrelevant costs including sunk costs and fixed costs.
• Recommend the most appropriate decision for management based on your analysis.