Problem
A. The Veggie-Buffet Restaurant is a downtown expensive buffet-only restaurant that specializes in trendy vegetarian salads and soy-based meat substitutes. When customers first enter the restaurant, they immediately take a buffet tray and a large plate and pass though the buffet, selecting food items of their choice. The buffet is offered to all at a fixed price, and customers can eat as much as they can pile on their plate, but they cannot return to the buffet line once they have left it. At the end of the buffet line, customers are offered the option of purchasing nonfruit drinks or drinks in the fruit juice bar, which is located past the buffet line. Customers who purchase the juice bar option are given a plastic glass that is tinted slightly blue. Those who do not purchase the juice bar option are given the same plastic glass but without the blue tint. The juice in the juice bar is made from fresh fruit and fresh fruit juice but mixed with a good bit of water and raw sugar. Diluting the juice is necessary for cost-control reasons; pure fresh juice would cost too much to offer. In any case, those with the blue-tinted glass are permitted to return as often as they want for refills. On the other hand, those with the clear plastic glasses are offered filtered water and ice in the same fruit bar area. Midge Greenwafer, the owner, has noticed in recent months that profits appear to be down even though the customer count seems to be holding steady. Her first reaction is look to the juice bar because the weekly bill for fresh fruits and juice is much higher than she would like it to be. She does not spend a lot of time in the restaurant because she has several other businesses, so she has to rely on restaurant employees to help her figure out the problem. So, Midge asked Sanahoria Hambre, her favorite shift manager, about what might be causing the problem. Sanahoria had an immediate answer: "The problem is that many people are not paying for the juice bar but are filling their water glasses with juice. I see it all the time. Just yesterday, I saw a family of eight all freeloading on the juice bar." "That's theft," said Midge. "Yes, but there's not much we can do about it. We do not have the staff to constantly monitor the juice bar. Most of the time the problem just goes undetected. But when one of our staff does see a clear glass being used in the fruit bar, she politely reminds the customer that the juice bar is an extra charge." "Good," said Midge. "Now we just need a better way to detect customers doing this."
Task
a) Make a simple detection system that can be used to solve the juice bar crises.
b) What do you think is the optimal role for detection in this problem?
B. Ashley Wesley is the assistant controller at the Walitin Construction Company. Walitin is headquartered in Miami, Florida, and has a general contractor's license in 30 different states. It is a privately held company with about 5,000 stockholders, with the majority of the stock being owned by the Walitin family. Roberta Walitin has been the CEO of Walitin Construction for the previous 12 years. Everyone considers her an excellent leader with excellent business skills. She has an undergraduate degree from the University of Illinois in engineering and an MBA from the same school with a concentration in accounting. Roberta has always insisted on ethical business practices, so two years ago she worked with Ashley to set up an ethics hotline, which Ashley personally manages on a daily basis. Anyone either inside or outside of the company can submit tips anonymously by e-mail, telephone, or a special Web page she had set up. There is a prominent link to the hotline on the home page of the company's Web site. Since Ashley set up the hotline, she has received three tips, all via the Web. In every case, the tip was about a subcontractor overbilling the company for services rendered. In two of the cases, she was unable to confirm or disconfirm whether there was fraud, mainly because it is almost impossible to investigate the work of a subcontractor on a job that has already been completed. But in the other case, she caught a roofer billing for fictitious work. She did not report the fraud to authorities, but Roberta did immediately replace the subcontractor with another roofing company. Ashley reports to Bob Benson, Walitin's controller. He's been with the company for many years and works very closely with Roberta. His main interest seems to be producing the financial statements and working with her to obtain new clients. Roberta and Bob spend large periods of their time going to lunches with clients, participating in civic meetings, and helping in small community-service construction projects. Because Bob is busy so much of the time with outside activities, Ashley pretty much runs everything in accounting on her own except for the software and hardware, which Bob manages in conjunction with the head of the IT department. Bob is not interested in details, and anytime Ashley tries to explain something to him, he simply waves a hand and says, "Don't worry me with operational issues. Just take care of it." Ashley has learned to live with his hands-off approach. Overall, Ashley runs everything smoothly. Her main problem is that Betty Grabber, the senior accountant reporting to her, wants Ashley's job. To make things worse, Betty is a niece of Roberta Walitin's husband. Betty is a very wily person. Her goal is to have Ashley fired, and she's been using her family connections to get the message to Roberta that Ashley is scheming to have Bob Benson, the controller, fired. Ashley also suspects that Betty has been spreading a rumor that she's planning to go to work for a competitor if she is not successful in taking over Bob's job. Ashley is unsure as to whether Bob is aware of the rumors. He seems to be avoiding her recently, and there seems to an edge in his usually friendly voice. Ashley is feeling depressed just thinking about it. She's heard that Bob is having serious marital problems. Perhaps those problems are affecting the way he acts. This morning Ashley had a major surprise when she started reading her e-mail, which contained a new anonymous tip. Someone had submitted it last night via the Web, and it had automatically been forwarded to her via e-mail. The tip read as follows:
To: Walitin Tip System
From: [email protected]
Sent: Tuesday 8/1/2015
Ms. Wesley,
I'm sending this tip to help you. I understand what you are going through. You're working for a liar and a thief. Bob Benson is hacking the accounting system to produce fraudulent financial statements. He's doing it in such a way that you'll get the blame. It's going to be a big mess.
Task
a) What should Ashley do? Should she try to investigate? Should she report the tip to Roberta?
b) Evaluate Walitin's hotline and make recommendations for its improvement.