This assignment can be group work or individual work, depending on your preference. A maximum of 3 group members is allowed. You will be assigned one of the following three cases by the professor. Do not work on all three cases. 1. To ensure that the correct size of heart valve is available for heart surgery, Heart Plus, the make of the valves employs salespeople to place and maintain inventories in hospitals in its market. After a valve is used in surgery, Heart Plus, bills the patient’s insurance company and credits the sales person with the sale. Each sales person earns a commission based on a percentage of revenue of the sales in their territory. Because Heart Plus does not get paid until it sells its valve, it must bear the cost of holding inventory calculated as the cost of capital (assumed 12%) time the wholesale cost of the valves placed in the hospital. Problem: Heart Plus faces a cost of holding inventory that is higher than its competitors. The salespeople are clearly overstocking hospitals in their territory. Considering that Heart Plus does not want to lose good sales people how do you fix the problem? 2. A large coal-burning electric power plant is located on a river and every week a dozen barges arrive loaded with coal to feed the power plant. The Transportation Division of the parent company which is responsible for transporting the coal to the Power Plan Division pays a barge company to make the coal deliveries. Once the barge arrives at the docks, the Power Plant Division is responsible for unloading it.. The Power Plant Division is very slow to unload the barges, especially if more than one barge must be unloaded simultaneously or if a barge arrives on a weekend. The Power Plant Division has just one crew of dockworkers who rarely work over time or on weekends. If the company ties up the barges for more than a three day period the barge companies charge the Transportation Division a fee for time above and beyond the customary three days. Problem: Since very few barges are unloaded within three days the Transportation Division faces unusually high transportation costs. You have been asked to fix the problem. What do you recommend? 3. A large video program and internet provider has seen a 10% annual rate of subscriber growth over the past three years. The growth rate has been spurred by a marketing department that typically has three or four marketing campaigns a year to drive new subscriptions. Over the past year subscriber uncollectables have grown 40% above the previous years. The executives of the company want to see at least double digit business growth for the company and have agreed to new marketing campaigns to promote new subscribers. Problem: The reason for the high growth rate in uncollectable accounts is not clear. The growth in these accounts has caused the net earnings of the company to be lower than expected. What do you recommend that the company do to solve the uncollectable issue? For the assigned problems make sure to develop a hypothesis statement and present logically associated business decision alternatives. Prepare not more than three slides presenting your statement of the problem/issue, hypothesis and potential business alternatives. The presentation should take no longer than 5 minutes. In addition, presenting your approach to addressing problems above use your training in economics and answer the following questions as a guide to your proposed actions. a. Who is responsible for making the decision? b. Does the decision maker have enough information to make a good decision? If not what information is required? c. Do they have incentive to do so? d. How would you go about determining the best course of action?