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A prominent consultant was once asked: “How much should a company spend making an important business decision?” His response: “I always recommend the ‘10 Percent Rule.’ So, if the decision is about an expenditure of $100,000, then the company should spend roughly $10,000 making the decision. If the expenditure would be $10,000, then making the decision should cost $1,000. And so on.” What do you see as the strengths and weaknesses of the 10 Percent Rule?

Operation Management, Management Studies

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