Question

Describe a decision made by your chosen company that involved costs that should have been ignored. Why did the company include these costs in their decision process? Why did the company make this decision and how did these costs affect the decision? Based on what you have learned in this course, what advice/recommendations would you give the company? Post your answer to the discussion board.

Answer 1

Costs which should have been ignored are future costs which could not be alterrred such as expenditure which has already been incurred, such as on a website.

The company included those costs in their decision making in order to assess the return they got from spending on that and the number of customers it gained.

The company thought that the relative costs were low as compared to the long term benefits of spending. Thus they decided to continue spending on maintaining a website.

I would suggest that the company should instead focus on spending money on keeping an adequate amount of inventory in order to meet the current demands of the general public. This would increase customer retention and more customers being acquired because of word of mouth instead of maintaining a website which doesn't increase much visibility if the company has a lower reach.