Quality versus costs. Assume Clearly Canadian has discovered a problem involving the mix of flavor to their seltzer water that costs the company $3,000 in waste and & $ 2500 in lost business per period. There are two alternative solutions. The first is to lease a new mix regulator at a cost of $4,000 per period. The new regulator would save Clearly Canadian $2,000 in waste and $2,000 in lost business each period.
The second alternative is to hire an additional employee to manually monitor the existing regulator at a cost of $2,500 per period This would save Clearly Canadian $1,500 in waste and $800 in lost business per period.
Which alternative should Clearly Canadian choose?