Business Decisions Research the different methods of business decision making. Present the best method you have found. Develop a business financial problem and use the method you have chosen to analyze your dilemma and come up with a solution based on the method you chose to implement. Present your problem to your classmates on the Discussion Board, how you worked through the issue, and the conclusion you reached. Make sure to show all of the steps and calculations you have used to make your decision. Be creative!
Here is an example
This is our last Discussion Board for the course! You made it!
Please read the directions carefully. Answer the questions you are asked to answer. Support your statements with your findings (numbers if applicable).
You will research different types of decision making. There can be several ways to research this, so here are two websites I recommend:
http://sourcesofinsight.com/4-decision-making-methods/
http://www.businessnewsdaily.com/6162-decision-making.html
Unit 10 ends Tuesday night along with the course. I would appreciate y’all posting as early as possible to ease the end-of-term grading frenzy. Please double check your grades in the course for accuracy. Let me know immediately if a grade is incorrect.
Louie’s Steamed Buns had to decide whether to change their laundry service company. The deal with “We Wash Linens” was $500 per month plus 10 cents per pound of laundry. They offered pickup and delivery every week because the facility was five miles away. Louie’s averages 200 pounds of laundry per month.
A new laundry service opened down the street. “Wash Your Stuff” had a nice, new store with new equipment. Their offer was $475 per month plus 13 cents per pound. If we delivered and picked up the linens ourselves, the price dropped to $425 per month and 13 cents per pound.
Here are the numbers:
We Wash Linens: $500 + ($0.10 * 200) = $520
Wash Your Stuff: $475 + ($0.13 * 200) = $501
Wash Your Stuff without Pickup/Delivery: $425 + ($0.13 * 200) = $451
For this problem, I used “Consult Style Decision Making”. The managers were asked if they have a strong opinion one way or the other. Were they loyal to We Wash? Could we reasonably transport 50 pounds of laundry each week to a location a quarter of a mile down the street in order to save $69?
While discussing this with the managers, another option surfaced. Should we buy a washer and dryer for the restaurant? A commercial washer and dryer cost $3,000. The managers and I estimated spending $100 on supplies and $400 on payroll each month to do our own laundry.
Sinking Fund contribution per month to have $3,000 in two years:
3000 * ((.05/12)/(((1 + (0.05/12))^(12*2)) – 1))
= $119.11
The decision we made was to change laundry services to Wash Your Stuff and transport our own laundry. This would only last for two years, because we would take the $69 savings along with $50 squeezed from profits to invest in the sinking fund each month. The plan is to buy our own machines in two years. The worst case scenario here is that we change laundry services again and if we decide not to buy machines, we will have $3,000 in an account that can be used for something else at the restaurant.
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