Figure 13-2. ColorPro uses part 87A in the production of color printers. Unit manufacturing costs for part 87A are:
ColorPro uses 100,000 units of 87A per year. Filbert Company has offered to sell ColorPro 100,000 units of 87A per year for $12. Fixed overhead is unavoidable.
-Refer to Figure 13-2. Which of the following is a qualitative factor that might affect ColorPro's decision?
A) Filbert has an outstanding reputation for quality.
B) Ordering from Filbert would give ColorPro a chance to see how well Filbert could meet JIT standards for ColorPro's other products.
C) Filbert is known for the reliability of its products.
D) Making the part in-house would help ColorPro avoid layoffs of direct and indirect labor.
E) All of these.

Question

Figure 13-2. ColorPro uses part 87A in the production of color printers. Unit manufacturing costs for part 87A are:
  ColorPro uses 100,000 units of 87A per year. Filbert Company has offered to sell ColorPro 100,000 units of 87A per year for $12. Fixed overhead is unavoidable.
-Refer to Figure 13-2. Which of the following is a qualitative factor that might affect ColorPro's decision?
A) Filbert has an outstanding reputation for quality. 
B) Ordering from Filbert would give ColorPro a chance to see how well Filbert could meet JIT standards for ColorPro's other products. 
C) Filbert is known for the reliability of its products. 
D) Making the part in-house would help ColorPro avoid layoffs of direct and indirect labor. 
E) All of these.

Quizplus · Accepted Answer

All the options listed (A, B, C, D) are qualitative factors because they involve subjective or judgment-based considerations that can affect ColorPro's decision, such as reputation, opportunity to test JIT standards, reliability, and employment impacts, rather than purely quantitative or numerical factors.