$-5($Algo$)$

is of Glen Arbor, Michigan, is a small batch manufacturer of high$-$end bicycles.

cally builds bicycles in batches of one to three units. Quality is high, only to be

en the typical bicycle frame costs $$2,900$ and up$.$ Yet, profits have not kept

i management's expectations. Management has set a goal of generating a

$.5$ percent return on assets. As a result of a corporate SWOT analysis,

has identified one critical threat: the costs at Noble are simply too high$-$and

t opportunity: because of the flexibility of operations and the experience of the

many of whom are either professional or serious amateur bicyclists, Noble is

$?$ to become an innovation leader. A top management team consisting of the

ector, the finance director, the corporate vice president, the purchasing

the director of operations management has developed two alternative

educing costs through the application of lean systems and procedures.

roduct innovation.

$\text{'}$ two approaches, the team has generated the following table. Use Figure $2\mathrm{.}3.$

ble Bicycles' current ROA?

your answers to $2$ decimal places.