Real-Life Decision Making
You are a snowboard designer. You have to pick the materials you work with
carefully. You want to be able to get the best materials for the best prices.
You have earned a good reputation as a quality designer. You have a reputation
for never using poor quality materials, and always keeping your boards at
an affordable price.
A top snowboarder has asked you to design a snowboard for him that he can
take with him on the international market. He is asking you to design a special
snowboard just for him, with the potential to mass-produce it in the near
future.
If he is happy with the quality of the board, the design and
the costs, he will consider producing over 1,000 of these boards. What you
like about this particular contract is that you will be working on a design
that is unique and will advertise your name to the international market. If
this board is what your client wants, there will be huge amounts of money
to be made. You will be set.
You spend a lot of time discussing the design with your client, and agree
on what you both would like to see. When it comes to the materials, your client
has decided to leave that all in your hands. He has decided that because you
have the experience, you would know the best materials to use.
You have to decide which wood to use for this project. Type A is more expensive
and of a better quality. But if you use it, your profit will only be three
percent.
Type B is less expensive and therefore of a lesser quality, although it
will work fine for the project. With type B, you will show a profit of 18
percent. Type B will make a good board, but one that would only last half
as long as type A.
What do you do?