QUESTION 4 Which option should this operations manager choos

QUESTION 4 Which option should this operations manager choose? Scenario A Original Current State of Affairs Scenario B Hire a Salesperson Hire a Buyer With a Sales person, focus on increasing sales by 12% Do nothing With a Buyer, focus on reducing material costs by 4% It is estimated that this business will earn a 7% profit It is estimated that this business will earn a 10.8% profit It is estimated that this business will earn an 8% profit o Scenario A-hire a buyer Scenario B-hire a sales person Do nothing There is not enough information to make a decision.

Solution

Out of the three scenarios, scenario A gives the greatest return i.e 10.8%. Hence, the operations manager will choose option (A) i.e hire a buyer.