Chapter 10, Problem 1EDM

Explanation of Solution

Ethical lapse:

Ethical lapse is the fault or error in decision which have bad consequences on either results or in methods. It doesn’t essentially means that complete shortage of integrity but a mistake while taking the decision without proper discussion or realities.

“Yes”, Kelvin has an ethical lapse by cherry-picking the data for his presentation.

Reason:

• Clearly, kelvin prefers his selection by purposely select the lower end of loss predictions instead of going by mean value over for all creativities.
• It is ethically incorrect and might or might not company cost in short run, but it will cover the technique for negative penalties in longer run...