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Quality versus costs. Jack has discovered a problem involving the mix of lye to the dry concrete mix that costs the company $20,000 in waste and $14,000 in lost business per period. There are two alternative solutions. The first is to lease a new mix regulator at a cost of $14,000 per period. The new regulator would save Jack $14,000 in waste and $8,000 in lost business. The second alternative is to hire an additional employee to manually monitor the existing regulator at a cost of $12,000 per period. This would save Jack $10,000 in waste and $8,000 in lost business per period.

Which alternative should Jack choose?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M91534734

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