1. Hightech manufactures color printers. The are in the process of planning the production and design of Model CX-700, one of their popular selling models. The breakdown of the cost for producing Model CX-700, and the value index computed for this last period, are provided. (For simplicity assume there are only three components.) The first component is the ink cartridge, which costs $45 and determines color quality. The second is the color sensor, cost of $35; it matches screen color to printed color. The final component is a paper sensor, which costs $20 and lights up when the machine is out of paper. The customers want sharper colors, a better correspondence between what see on screen and what they print on paper, and a sensor that can be connected to the PC speaker to issue an audio out of paper warning. The additional spending required to provide these features and the value index for these three components is as follows: Ink cartridge, additional spending of $27 has a value index of .80; Color sensor costs $18 more and has a value index of 1.543; and finally the Paper sensor which costs $5 more and has a value index of.500. The company feels that if they were to provide all three of these features, the customers would pay an additional $49 for the printer.

Which of the components would you suggest that the company enhance?

1. A.The color sensor since its value index is 1.543.
2. B.The paper sensor since it is only $5.
3. C.Both the color sensor and the paper sensor; their costs are only $23 more in total and their value index total is 2.043
4. D.The Ink Cartridge since it is the most expensive and we should handle it first.