Nirvana Products Company Has Just Gone Through a Rigorous Evaluation

question 4

True/False

Nirvana Products Company has just gone through a rigorous evaluation due to sliding profits in the past year. The engineers strongly recommend implementing an aggressive preventative maintenance program, but the accountants say it will cost $50,000. The lawyers insist on a zero-defect product inspection as the units are being packaged, but the accountants say it will cost $40,000. The vice president for production said he just thought it was too expensive of a gamble to take, but the factory manager pointed out that if they did not look ahead at the consequences, they could easily lose $100,000 of sales to their competitors because of shoddy goods, and a costly production shutdown that would cost them another $100,000 if the machinery gives out unexpectedly.
In this situation, the company should not invest in the quality programs being recommended because they are not justified on a cost/benefit basis.

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Definitions:

Linguistic Relativism

The theory that the structure of a language affects its speakers' worldview or cognition, also known as the Sapir-Whorf hypothesis.

Longitudinal Study

Research design that involves repeated observations of the same variables (such as people) over short or long periods of time, often years or decades.

PTSD

Post-traumatic stress disorder, a mental health condition triggered by experiencing or witnessing a terrifying event, characterized by flashbacks, nightmares, and severe anxiety.

Practical Intelligence

A type of intelligence that involves the ability to solve everyday problems through the use of experience-based knowledge.