In Chapter 8, we looked at short-term decision making. These decisions involve both qualitative and quantitative issues. In this part of the assignment, we will look at the qualitative issues involved in the short term decisions we studied. Qualitative considerations for each decision are presented in our text. Students should use their own words to explain these issues. Do not use the bike example from our text. Answers to numbers 1-4 are worth 6 points each for a total of 24 points.

1. Special Orders. We know that if the incremental revenues exceed the incremental expenses of a special order, the order should be accepted. This is quantitative analysis. List three qualitative issues that should be considered before accepting a special order.

A.

B.

C.

2. Make or Buy? We know that if the differential costs of buying from the outside supplier are less than the different costs of making the part, we should outsource. This is quantitative analysis. List three qualitative issues that should be considered before outsourcing.

A.

B.

C.

3. Dropping Unprofitable Segments. We would decide to drop a segment is the direct cost savings is greater than the lost revenue from dropping the segment. List three qualitative issues that should be considered before dropping a segment.

A.

B.

C.

4. Constrained Resource. For this decision we want to maximize the contribution margin per unit of scarce resource. When might we decide to make one product over another even if it were not the most profitable given the resources we have available? List three qualitative issues that should be considered before using up a constrained resource.

A.

B.

C.

Chapter 8 also talks about corporate social responsibility (see page 265). Go to The Home Depot website. https://www.homedepot.com/

I want you to see how you can find financial information about a company on its website. If you go to the bottom of the page, you will see investors relations under about us. Double click this. You will see that stock information and financial information is available on this page. Most companies have an investor relations page with this information available.

But this time we will look at responsibility. Go to this page and select under our operationslearn more. I think there are 11 things that Home Depot incorporates into its stores to be socially responsible. Pick two of these. Explain what Home Depot has done, and indicate and explain what type of decision was involved. Use complete sentences that make sense.

As an example, I will use #10zoned planting areas.

Item: #10Zoned Planting areas.

Explanation: Home Depot uses hardy plants that do not require as much water and fertilizer to minimize water usage and fertilizer usage which could affect the water supply.

Type of decision: I think this is a process further or sell decision. Home Depot decided to add plantings in its parking lots. It could not have any planting areas or used cheaper plants to save money. Instead Home Depot spent more on these plantings to aid in protecting the environment.

Now it is your turn. Add lines as necessary. Each is worth 13 points for a total of 26 points. Move to the next page.

Item:

Explanation:

Type of decision

Item:

Explanation:

Type of decision

This is the end of Business Assignment 4. Save your file and upload in the drop box provided.