2.

BENEFITS ECEED THE COST

BENEFITS EQUAL THE COST

COST ECEED THE BENEFITS

DOES NOT JUSTIFY

JUSTIFIES

3.

ELECTRONIC ORDER PROCESSING SHOULD INCREASE HUMAN ERRORS AND THEREFORE INCREASE COST

ELECTRONIC ORDER PORCESSING SHOULD REDUCE HUMAN ERRORS AND THEREFORE DECREASE COST

EMPLOYEE LAYOFFS MAY HURT MORALE AND EFFICIENCEY THUS INCREASING COST

PROVIDING DEALERS WITH CURRENT INFORMATION COULD HELP SUN GAS INCREASE ITS INVENTORY LEVELS

PROVIDING DEALERS WITH CURRENT INFORMATION COULD HELP SUN GAS REDUCE ITS INVENTORY LEVELS

THE DIFFICULTY AND COST OF LAYING OFF EMPLOYEES MAY REDUCE THE EPECTED BENEFITS

CFO Lori Rodriguez believes that dealers will not adopt the new online system unless Sun Gas provides financial assistance to help them purchase or upgrade their computer systems. Rodriguez estimates this one-time cost at $750,000. Sun Gas will also have to invest $170,000 in upgrading its own computer hardware. The cost of the software and the consulting fee for installing the system will be $230,000. The online system will enable Sun Gas to eliminate 25 clerical positions. Rodriguez estimates that the benefits of the new system's lower labor costs will have benefits of the Rodriguez saved the company $1,345,000