Reference no: EM132614289

Ron's been buried in sales agents' meetings and dialog with some US regional managers for three straight days and it seems they have the opportunity to buy a new bottling plant that could significantly decrease their cost of production for drinks. He arrives in your office for your weekly meeting and proudly says "After all is said and done buying this bottling plant makes good sense - It will cost less than the one we bought last year."

Question 1: Why is the rationale for the decision not necessarily an appropriate one? What else needs to be considered?

Question 2: Provide constructive feedback to at least two other students' postings.

Question 3: Ron seems to be basing his entire purchase decision on how the cost of the new purchase compares to the previous year's cost. How relevant is this? Why or why not? In terms of relevant costing analysis, what kind of cost is last year's purchase? What are the dangers of using a past decision as the basis for future decisions?

Question 4: What else needs to be considered? looking for specifics here - we don't have a lot of specifics in the case so make them up if you need to. Consider both qualitative and quantitative factors. Hint: Use your Balanced Scorecard to ensure you are covering all aspects of the decision