Discuss why qualitative characteristics must be considered when making decisions such as special orders, outsourcing, elimination, and replacement decisions. Give examples.
What will be an ideal response?
Answers will vary
As with quantitative data, qualitative characteristics that differ between the alternatives are relevant for decision-making. For example, in special order decisions, an important qualitative characteristic is the expected reaction of existing customers if they discover that the company has sold products to other customers at a lower selling price. In outsourcing decisions, management must worry about the possibility of low-ball pricing, quality fluctuations, and the likelihood that the supplier may discontinue operations. In elimination decisions, management must worry about the impact on employee morale and productivity if employees associated with a discontinued segment are terminated.
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