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    Alternative Solutions

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    Lebron Waters has discovered a problem involving its mix of flavor to seltzer water that costs the company $3,000 in waste and $2,500 in lost business per period. There are two alternative solutions. The first is to lease a new mix regulator at a cost of $4,000 period, which would save $2,000 in waste and $2,000 in lost business. The second alternative is to hire an additional employee to annually monitor the existing regulator at a cost of $2,500 per period, saving $1,500 in waste and $1,800 in lost business per period.

    Prepare a memo that evaluates the two alternatives. Which alternative should LeBron Waters choose?

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    Solution Preview

    This analysis involves two pieces: a cost increase (to implement the solution) and a savings (reduced waste and reduced lost business).

    The best solution is the one where the net savings (net ...

    Solution Summary

    This solution analyzes two potential alternative solutions and determines the better one.