Question

Jackson Systems is considering becoming certified to the ISO 9000 series of quality standards. Becoming certified is expensive, but the company could lose a substantial amount of business if its major customers suddenly demand ISO certification and the company does not have it. At a management retreat, the senior executives of the firm developed the following payoff table, indicating the net present value of profits over the next 5 years.

	Profits (in $000)
	Standards Req	Standards Not Req
Become Certified	$575.00	$500.00
Stay Uncertified	$450.00	$600.00

What decision should the company make using the minimum strategy?

Select one:

a. Become certified

b. Do not certify

c. Not enough information to decide

Answer 1

19 Minimum Certified Uncertified MIN (B2:C2) MIN(B3:C3) 2 575 500 450 600 4

19 Standards req Standards not req Minimum 2 Certified 3 Uncertified4 4 575 500 450200500 450 600 ums, certified has higher value. 7Therefore, best 9 10