1. What are three costs, benefits, risks, and intangibles associated with each project? 2. Based on your answer to question 1, which project would you choose?
1. What are three costs, benefits, risks, and intangibles associated with each project? 2. Based on your answer to question 1, which project would you choose?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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In April 1999, one of Capital Blue Cross’ health-care insurance plans had been in the field for
three years, but hadn’t performed as well as expected. The ratio of premiums to claims
payments wasn’t meeting historic norms. In order to revamp the product features or pricing
to boost performance, the company needed to understand why it was underperforming. The
stakeholders came to the discussion already knowing they needed better extraction and
analysis of usage data in order to understand product shortcomings and recommend
improvements. After listening to input from the user teams, the stakeholders proposed three
options. One was to persevere with the current manual method of pulling data from flat files
via ad hoc reports and retyping it into spreadsheets. The second option was to write a program
to dynamically mine the needed data from Capital’s customer information control system
(CICS). While the system was processing claims, for instance, the program would pull out upto-the-minute data at a given point in time for users to analyze. The third alternative was to
develop a decision support system to allow users to make relational queries from a data mart
containing a replication of the relevant claims and customer data. Each of these alternatives
was evaluated on cost, benefits, risks, and intangibles.
QUESTIONS:
1. What are three costs, benefits, risks, and intangibles associated with each project?
2. Based on your answer to question 1, which project would you choose?
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