After retiring as a physician, Bob Guthrie became an avid downhill skier on the steep slopes of

the Utah Rocky Mountains. As an amateur inventor, Bob was always looking for something new.
With the recent deaths of several celebrity skiers, Bob knew he could use his creative mind to
make skiing safer and his bank account larger. He knew that many deaths on the slopes were
caused by head injuries. Although ski helmets have been on the market for some time, most
skiers considered them boring and basically ugly. As a physician, Bob knew that some type of
new ski helmet was the answer.

Bob’s biggest challenge was to invent a helmet that was attractive, safe, and fun to wear.
Multiple colors, using the latest fashion designs would be a must. After years of skiing, Bob
knew that many skiers believed that how you looked on the slopes was more important than
how you skied. His helmets would have to look good and fit in with current fashion trends. But
attractive helmets were not enough. Bob had to make the helmets fun and useful. The name of
the new ski helmet, Ski Right, was sure to be a winner. If Bob could come up with a good idea,
he believed that there was a 20% chance that the market for the Ski Right Helmet would be
excellent. The chance of a good market should be 40%. Bob also knew that the market for his
helmet could be only average (30% chance) or even poor (10% chance).

The idea of how to make ski helmets fun and useful came to Bob on a gondola ride to the top of
a mountain. A busy executive on the gondola ride was on his cell phone trying to complete a
complicated merger. When the executive got off of the gondola, he dropped the phone and it
was crushed by the gondola mechanism. Bob decided that his new ski helmet would have a
built-in cell phone and an AM/FM Stereo radio. All of the electronics could be operated by a
control pad worn on a skier’s arm or leg.

Bob decided to try a small pilot project for Ski Right. He enjoyed being retired and didn’t want a
failure to cause him to go back to work. After some research, Bob found Progressive Products
(PP). The company was willing to be a partner in developing the Ski Right and sharing any
profits. If the market were excellent, Bob would net $5,000. With a good market, Bob would net
$2,000. An average market would result in a loss of $2,000, and a poor market would mean Bob
would be out $5,000.

Another option for Bob was to have Leadville Barts (LB) make the helmet. The company had
extensive experience in making bicycle helmets. Progressive would then take the helmets made
by Leadville Barts and do the rest. Bob had a greater risk. He estimated that he could lose
$10,000 in a poor market or $4,000 in an average market. A good market for Ski Right would
result in a $6,000 profit for Bob, while an excellent market would mean a $12,000 profit. A third
option for Bob was to use TalRad TR, a radio company in Tallahassee, Florida. TalRad had
extensive experience in making military radios. Leadville Barts could make the helmets, and
Progressive Products could do the rest. Again, Bob would be taking on greater risk. A poor
market would mean a $15,000 loss, while an average market would mean a $10,000 loss. A
good market would result in a net profit of $7,000 for Bob. An excellent market would return
$13,000.
Bob could also have Celestial Cellular (CC) develop the cell phones. Thus, another option was
to have Celestial make the phones and have Progressive do the rest of the production and
distribution. Because the cell phone was the most expensive component of the helmet, Bob
could lose $30,000 in a poor market. He could lose $20,000 in an average market. If the market
were good or excellent, Bob would see a net profit of $10,000 or $30,000, respectively.

Bob’s final option was to forget about Progressive Products entirely. He could use Leadville
Barts to make the helmets, Celestial Cellular to make the phones, and TalRad to make the
AM/FM stereo radios. Bob could then hire some friends to assemble everything and market the
finished Ski Right helmets. With this final alternative, Bob could realize a net profit of $55,000 in
an excellent market. Even if the market were just good, Bob would net $20,000. An average
market, however, would mean a loss of $35,000. If the market were poor, Bob would lose
$60,000.

1. Definition of the Problem -

2.
Most of the accidents and deaths revolving around skiing is practically because of
head injuries. With this, most people think that wearing ski helmets are boring and not so
fashionable which is why they aren’t often worn.Develop the model

Alternatives/ Excellent Good Average Poor

State of
Natures

PP $5,000 $2,000 ($2,000) ($5,000)

LB $12,000 $6,000 ($4,000) ($10,000)

TR $13,000 $7,000 ($10,000) ($15,000)

CC $30,000 $10,000 ($20,000) ($30,000)

LB, TR, CC $55,000 $20,000 ($35,000) ($60,000)

w/o PP

Probability 20% 40% 30% 10%

3. Acquire input data Input data identifies all that would go in developing Bob’s idea
of the best ski; Ski Right. The input data therefore includes: development of
attractive and useful helmet, development of cellular component of the helmet,
 and the development of the helmet Radio. The profit margins presented by firms
to help in development of the Helmet and its components also comprise input
data and should hence be given maximum attention.
4.

5.
6. Develop and test the solution

Alternatives/ Excellent Good Average Poor EMV

State of Natures

PP $5,000 x $2,000 x ($2,000) x 0.3 ($5,000) x 0.1 1,000+800-600-500

0.2 0.4 = ($600) = ($500) = $700
= $1000 = $800

LB $12,000 x $6,000 x ($4,000) x 0.3 ($10,000) x 2,400+2,400-1200-1000

0.2 0.4 = ($1,200) 0.1 = $2,600
= $2,400 = $2,400 = ($1,000)

TR $13,000 x $7,000 x ($10,000) x ($15,000) x 2,600+2,800-3,000-1,500

0.2 0.4 0.3 0.1 = $900
= $2,600 = $2,800 = ($3,000) = ($1,500)

CC $30,000 x $10,000 x ($20,000) x ($30,000) x 6,000+4,000-6,000-3,000

0.2 0.4 0.3 0.1 = $1,000
= $6,000 = $4,000 = ($6,000) = ($3,000)

LB, TR, CC w/o $55,000 x $20,000 x ($35,000) x ($60,000) x 11,000+8,000-10,500-

PP 0.2 0.4 0.3 0.1 6,000
= $11,000 = $8,000 = ($10,500) = ($6,000) = $2500

Probability 20% 40% 30% 10%

7. Analyze the results

From the chart above it can be deduced that , Leadville Barts (LB) presents the best option

which Bob should make good use off in developing his helmet. This option will yield the

highest EMV, which is $2,600.

8. Recommend courses of action to:

1. Solve the problem accurately by computing for the expected monetary

value of each given scenario.

PP Monetary Value

=1000+800-600-500

=$700.

LB Monetary Value

=2400+2400-1200-1000

=$2,600.

TR Monetary Value

=2,600+2,800-3,000-1,500

=$900.

CC Monetary Value.

=6,000+4,000-6,000-3,000

=$1,000.

LB, TR, CC w/o PP Monetary Value.

=11,000+8,000-10,000-6,000

=$2,500.

Recommended action: Bob should engage LB in developing the Helmet because this option

guarantees higher monetary value; $2,600, compared to other available options.

2. Address corporate social responsibility using triple bottom line framework

The TBL framework incorporates three factors of performance; financial, social and

environmental factor. In order to address these factors and enhance sustainability of

his venture, Bob should pick on the corporate that guarantees financial returns,

social engagement of stakeholders as well as the corporate ability to enhance

environmental sustainability.