When you started as CEO of ChocoBot Inc., you were given the task of increasing profits in the candy necklace line. One potential cost savings that emerged was broken and damaged product in the Pearls and Baubles product line. This line is known for both its delicate blend of flavors and its delicate design. Currently about 10% of that product arrives to retailers broken, which costs you about $150,000 in lost profit. You meet with your Chief Operating Officer and Chief Research Officer and they each give you a recommendation. Which one do you choose?
A. Your Chief Operating Officer suggests outsourcing the shipping of the Pearls and Baubles line to shipping experts Candy Movers. Candy Movers tells you that their "luxury packing" service will guarantee that 100% of the candy arrives intact. The shipping and extra packaging will cost you about $38,000 per year.
B. Your Chief Research Officer says that they have invented an additive that strengthens the chocolate that makes up the necklaces The additive will cost about $5,000 per year, and only changes the taste and texture of the chocolate slightly. It was thoroughly tested, and is perfectly safe and edible. Shipping runs show that 100% of the candy arrives intact with this approach.