Mount Olive College has now become The University of Mount Olive (UMO). As Mount Olive expands, it needs to make some critical decisions. As a graduate student of this institution, you are asked to turn your reasoning powers on to Mount Olive's expansion.

First, UMO would like to know the extent to which we should expand. In other words, what is the optimal size of UMO, and how will we know if we are overextended? If we are looking at costs and profits, several issues arise which you will need to deal with. For example, what is the appropriate "cost" to use and, consequently what is the correct view of "profit"?

With the expansion, you will need to look at the Law of Diminishing Marginal Returns and determine whether it applies to education, especially in an online format. How does the Law apply to students and to the hiring of new faculty?

Furthermore, if Mount Olive hires adjuncts, what sort of agency problems might arise? How can they be best dealt with?

Finally, we need to consider the long-term effects of expansion on UMO's reputation. Specifically, what is the value of Mount Olive's reputation today and in the future if there is over expansion? To whom is UMO's reputation most valuable? How can the stakeholders help insure that the reputation is upheld?