Mario Corporation has defective products in its current inventory. It has the opportunity to either sell, scrap, or rebuild the defective products. In your opinion, what should Mario Corporation consider before making its decision? Explain your choice. In your response to a classmate, indicate whether you agree or disagree and why.
Mario Corporation has defective products in its current inventory
Full Answer Section
- The cost of rebuilding the defective products. Rebuilding the defective products will involve the cost of the materials and labor, as well as the cost of any testing or certification that may be required.
- The potential liability of selling or rebuilding the defective products. If Mario Corporation sells or rebuilds the defective products and they cause harm to someone, the company could be liable for damages.
- The impact on Mario Corporation's reputation. If Mario Corporation sells or rebuilds the defective products, it could damage the company's reputation and make it more difficult to sell its products in the future.
- The impact on the company's bottom line. The cost of selling, scrapping, or rebuilding the defective products will have a direct impact on the company's bottom line. Mario Corporation needs to weigh the cost of each option against the potential benefits.
- The time it will take to sell, scrap, or rebuild the defective products. Each option will take a different amount of time. Mario Corporation needs to consider how quickly it needs to get rid of the defective products and whether it has the time to rebuild them.
- The availability of resources. Mario Corporation needs to make sure that it has the resources it needs to sell, scrap, or rebuild the defective products. For example, if Mario Corporation wants to rebuild the defective products, it needs to make sure that it has the necessary materials and labor.
Sample Answer
Mario Corporation has a difficult decision to make. It has defective products in its inventory, and it can either sell them, scrap them, or rebuild them. There are a number of factors that Mario Corporation should consider before making its decision, including:
- The cost of selling the defective products. Mario Corporation may be able to sell the defective products for a reduced price, but it is also possible that it will have to pay to have them removed from its inventory.
- The cost of scrapping the defective products. Scrapping the defective products will involve the cost of transporting them to a scrap yard and the cost of having them recycled.