The DoorCo Corporation is a leading manufacturer of garage doors. All doors are manufactured in their plant in Carmel, Indiana, and shipped to distribution centers or major customers. DoorCo recently acquired another manufacturer of garage doors, Wisconsin Door, and is considering moving its wood-door operations to the Wisconsin 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: Demand falls slightly, with no noticeable effect on production.
Demand and production decline 20%.
Demand and production decline 40%.

The table below shows the total costs under each decision and scenario.

Slight Decline 20% Decline 40% Decline
Stay in Carmel $980,000 $830,000 $635,000
Move to Wisconsin $990,000 $835,000 $630,000

Required:
a. What decision should DoorCo make using the average payoff, aggressive, conservative, and opportunity loss decision strategies discussed in this chapter?
b. Suppose the probabilities of the three scenarios are estimated to be 0.15, 0.40, and 0.45, respectively. Construct a decision tree and compute the rollback values to find the best expected value decision.

Jameson manages a well-known cell phone company. this company has been voted as having the best cell-phone service. consumers appreciate the fact that they can call from almost anywhere in the world and the service still gets through. jameson knows that the company's product far surpasses that of the competition. one thing has been bothering him, though. in order to put so many resources into ensuring the best service, jameson has cut back on employees at the firm's customer call center. recently, consumers have begun complaining about long wait times when they call in with a problem or concern. although its cell phone service is still considered one of the best, customer satisfaction with the firm's customer service has plummeted. jameson does not understand why consumers are getting so upset. he believes the exceptional cell phone service more than makes up for long waiting periods and other issues with its customer service. "after all," he says, "they can't have it all. if i invest more in customer service, that means less investment on ensuring the quality of our product offering."refer to scenario. jameson has asked you, a marketing consultant, to give him advice. he cannot understand how a cell-phone company with the best product offering in the cell-phone service industry could get such low satisfaction ratings simply because the customer service is not up to par. you suggest that jameson has a narrowly defined view of the company's product offering. you tell jameson that successful marketers should define their products as what they

Before setting your prices, it's wise to a. subtract your profit margin from your costs. b. research industry standards. c. memorize the formula for cost plus. d. ignore your competitors' prices.

You have collected the company performance data below for acme shoes and brand x