1.30 (pg 28)
a) 1. Checking all components to find out the faulty ones and send them back to the suppliers. This, can also delay business operation but at the same time will stop future faulty assemble.
2. This will benefit the company because they will be able to return the faulty components to the it may have some shipping.
3. by developing close relationship with few suppliers could the cost of supplies but at the same time they will make sure of receiving no faulty components.
b) Cost management analysts might have developed there cost estimates by checking last year qualitative and quantitative factors benefits and cost.
c) I will recommended thoroughly inspect incoming components before they are assembled because this will help them to know who the supplies is and they will be able to send the faulty components back.

1.31
A. “Whom To Pay Is More Important Than How Much Or How” by Claudio Fernández-Aráoz
a. Strategic decision making can be seen throughout this entire article. It shows how a well-thought out strategy can mean for a successfully run business. It shows that the fore-sight of a successful business and decisions made based upon that fore-sight will lead to long term benefits.
b. The strategic “problem” that motivated this decision making is the well-known argument of the “moral and practical appropriateness of how much to pay, or on practical suggestions on how to pay.” (Fernández-Aráoz) In other words, it is more often focused on how much, or how, to pay than who should be paid. This “problem” can cause the company to downfall, simply because their strategic decision making was focused on the wrong thing.
c. The suggestion to run companies with the question in mind “who to pay” rather than “how much” or “how to pay” is based off of more than 20 global executive search experiences as well as information based on the studies of others.
“As I highlight in my book on great people decisions, when Jim Collins was asked how important executive compensation and incentive decisions are for building a great company he concluded, after 112 analyses, that his research could find no pattern. In other words, executive compensation appears to play no significant role in determining which companies become great. His conclusion strongly reinforces the argument that decisions about whom to pay in the first place are much more important than how much or how.” (Fernández-Aráoz)
d. Strategic decision making is definitely successful in that it shows long-term benefits for the company rather than short-term benefits. It is a decision concluded from experience and strong information and evidence.

B. I believe that this argument that it is more important to argue whom to pay rather than how much or how to pay them is a solid argument because it is more important to make sure that you are paying the right person for the job rather than fighting over how much to pay or how to pay them. It can be seen in many instances that the proper motivation can lead to the proper results. It is only human nature to expect a reward for a well done job. Fair treatment and compensation are regarded as compliments for a job well done and should be received by the proper person. This argument will not only help one company, but rather all companies in general because this strategic decision is one for the long-term benefits of all companies.

Fernández-Aráoz, Claudio. “Whom To Pay Is More Important Than How Much Or How.” Harvard Business Review. 2009. 2 July 2009.

1.38
The cost of internally “sourcing” products and services in this case will be that Andover’s in accordance with the company policy will be responsible of labor and “other” cost. The benefit here could be that they will pay less shipping cost.
Material could be quantitative (4,000 units) but not labor and other cost.
b) I will recommend that all customer should be responsible for labor and other manufacturing cost because this will be business cost and will prevent future problems with clients.