Real-Life Decision Making
Surfboards are made with different materials for different functions, and
different costs. There are surfboards made out of wood, fiberglass and even
plastic. Each has different costs, durability and performance.
You have to pick the materials you work with carefully. You want to be
able to get the best materials for the best prices. Your main priority as
a surfboard designer is to offer your clients a quality surfboard at an affordable
price. With this as your priority and business plan, your surfboard designing
business has been successful.
You have earned a good reputation as a quality designer. You have a reputation
for never using substandard materials. Plus, you always keep your boards at
an affordable price.
A large surfing organization approaches you. They want you to design a
special board for their club, one that you can easily produce for a good price.
What you like about this particular contract is that you will be working on
a design that is unique and will advertise your name to the international
market.
You spend a lot of time discussing the design with your client, and agree
on what you both would like to see. When it comes to the materials, your client
has decided to leave that all in your hands. They have decided that because
you have the experience, you would know the best materials to use.
You have agreed on a price. There are over 100 boards to be produced. You
can see that your profit margin changes dramatically with the type of wood
you decide to use. You have to decide which wood to use for this project.
Type A is more expensive and of a better quality. However, if you use it,
your profit will only be three percent. Type B is less expensive and therefore
of a lesser quality, although it will work fine for the project. With type
B, you will show a profit of 18 percent. Type B will make a good board, but
one that would only last half as long as type A.
What do you do?