9. A Japan-based digital camera producers found the risk of an allergic
reaction (rash) due to the rubber grip of their XX model camera. Based on
sales data, an estimated 68,200 units of cameras were sold. The owner of
the company must make a most cost-effective decision to fix the issue. If you
are in that position, which choice below would be the most cost effective?
A. Recall all the sold cameras and change the old rubber grip with a new
safer one. The financials behind this method include:
‐ The cost for each new rubber grip would be $40
‐ Service charge for the employer fixing the problem would be $20
‐ The cost to contact each customer to make the fix would be $1
‐ A fine of $200,000 to be paid for Consumer Product Safety Commission
‐ An average of 90% customers avail the facility of fixing the problem
B. Contact each customer and ask them to provide the postal address to send
an extra cap around the rubber grip to avoid direct contact with the
consumer’s skin (the extra cap can be easily fitted by consumer).
‐ The cost for each new cap would be $20
‐ The postal charge for sending cap would be $10
‐ The cost to contact each customer to make the fix would be $1
‐ A fine of $200,000 to be paid for Consumer Product Safety Commission
‐ An average of 95% customers avail the facility of fixing the problem
