Question
Bloom Floral offers a special-priced arrangement for holidays and business increases significantly during these specials. Cathy, the owner of Bloom, guarantees customer satisfaction and charges
Bloom Floral offers a special-priced arrangement for holidays and business increases significantly during these specials. Cathy, the owner of Bloom, guarantees customer satisfaction and charges $50 for these arrangement specials. Bloom receives orders for 1,000 of these arrangement specials for Mothers Day. Typically, 30% of these arrangements have to be reworked by Cathy to assure customer satisfaction. Each rework by Cathy costs approximately $8 per arrangement. Cathy believes that the rework problem could be significantly reduced if she holds a short training before each special-priced arrangement holiday. The expected cost of this training would be $100 per holiday. Cathy expects this training would reduce sales by 20 arrangements but would reduce Cathys rework to only 5% of the arrangements.
Should Bloom Floral implement Cathys idea? Show your calculations.
What nonfinancial and qualitative factors should Bloom Floral consider in deciding whether to implement the new plan?
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