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Lauren Lester is the department manager for Religious Books, a manufacturer of religious books that are sold through Internet companies. Lester's bonus is based on reducing production costs.
Problem 1: Lester has identified a supplier, Economy Paper, that can provide paper products at a 10% cost reduction. The paper quality is not the same as that of the current paper used in production. If Lester uses the supplier, she will certainly achieve her personal bonus goals; however, other company goals may be in jeopardy. What is the ethical issue? Identify the key performance issues at risk and recommend a plan of action for Lester.
Describe the concept of isoquants and isocosts and explain how to find the lowest cost for a given target production output quantity.
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