Continuation of PI-21 A: revised probabilities (Learning Objectives 5, 6)

P1-21A asked you to perform a quantitative analysis to help SeaSpray Marine’s man¬ agers decide whether to embark on the project. Now consider some qualitative factors in SeaSpray Marine’s ERP project.

1. Why did Greenwood create a team to evaluate IDG’s proposal? Consider each piece of cost-benefit information that management accountant Cobalt reported. Which person on the team is most likely to have contributed each item? (Hint: Which team member is likely to have the most information about each cost or benefit?)

2. Quantifying ERP benefits can be difficult. After further discussion, the team predicts that there is a 60% chance that the ERP installation will succeed and a 40% chance that it will fail. Should SeaSpray Marine still install the new ERP system?