Chapter 11, Problem 3Q

Explanation of Solution

Main impact areas:

Most commonly considered impact areas are as follows:

• Financial
  • It is the process of providing funds for business activities, making purchases or investing.
• Productivity
  • It is defined as a business operation or ratio between the output volume and the volume of inputs.
• Reputation
  • It is defined as the qualitative belief of a person regarding a brand, company, product or service...

Explanation of Solution

Low, medium, and high impact for each impact areas:

Most commonly considered impact areas with low, medium, and high impact are as follows:

• Financial
  • Low impact – Sales drop by less than 2 percentage.
  • Medium impact – Sales drop by 2 to 10 percentage.
  • High impact – Sales drop by more than 10 percentage.
• Productivity
  • Low impact – Increase in annual operating expenses by less than 3 percentage.
  • Medium impact – Increase in annual operating expenses between 3 to 6 percentages.
  • High impact – Increase in annual operating expenses by more than 6 percentage...