Would you consider it Samsung’s failure not to prepare for this worst-case scenario? Why or why not? As a member of Samsung’s FP&A team, what would you do differently for evaluating future products?
Would you consider it Samsung’s failure not to prepare for this worst-case scenario? Why or why not? As a member of Samsung’s FP&A team, what would you do differently for evaluating future products?
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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We examine what might happen in the worst-case scenario, but the true worst case would involve a total disaster with extremely remote probability. We certainly would like to prepare ourselves for the worst possible outcome, but shall we make decisions based on something that is extremely unlikely to happen? Consider Samsung’s recent experience. Samsung was forced to recall 2.5million Galaxy Note 7 smartphones just one month after it was introduced because multiple reports on the phones caught fire, and eventually stopped all production in the following month. Some estimated that Samsung incurred a $5 billion write-off due to this fiasco.
- Would you consider it Samsung’s failure not to prepare for this worst-case scenario? Why or why not?
- As a member of Samsung’s FP&A team, what would you do differently for evaluating future products?
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