DuMond International, Case Study Example

Nancy’s analysis that the DuMond should go with the new product is quite a sensible and the safest alternative. The probable ban on the existing product exposes the company to considerable risk as compared to the new product. The new product guarantees considerably higher sales as compared to the old product, making it more economically viable to the company. Furthermore, news of the potential ban together with the scientific research on the negative effects of the current product is likely to affect the market’s perception and acceptance of the product, affecting revenue generated from the product line.

Owing to the high number of uncertainties associated with the probability of each event occurring, there’s considerable need to mitigate these uncertainties. She is positioned to get a better assessment from engineering as opposed to finding or determining the likelihood of ban. The ban is an external challenge that the company cannot control while the likelihood of the delay is an internal aspect of production that can be improved. There is need for a more accurate sales forecast for the new product as well. This is because the market would have to react to the banning of the existing product, necessitating an alternative in the form the new product.

The best place to begin to eliminate the uncertainties is the confirmation of the possibility of the delay. The new product generally appears to be the more economical alternative. However, the delay may affect the timing of the products arrival to the market. However, despite this fact of the delay, the company still stands to make more profit compared to the current product.

Works Cited

Chandra, Prasanna. Financial management : theory and practice. New Delhi: McGraw-Hill Education, 2011. Print.

Clemen, Robert T and Terence Reilly. Making hard decisions with decision tools. Mason: Cengage Learning, 2013. Print.

Horowitz, Ira. Organization and decision theory. Boston: Springer, 2013. Print.

Treeplan.com. “Decision Trees Using TreePlan.” Treeplan. Treeplan Guide. Treeplan.com, 2013. 191-212. Electronic Source.