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In the mid-eighties, the Toro company launched a promotion in which snowblower purchasers could refund a portion of their purchase if the next winter brought modest snowfalls. The amount of their refund was tied to snowfall amounts and so, the program was prey to certain risks and uncertainties. You will explore those risks and choices from a variety of perspectives.
Review the case study “The Toro Company S’No Risk Program” by David E. Bell (1994) from this module’s assigned readings. Click here to download the Toro Excel worksheet which contains data exhibits from the article; the exhibit titles match the tabs long the bottom of the worksheet. Use this tool to conduct your data analysis for this assignment.
Analyze the risks of the program from the following points of view:
The insurance company
Write a 4–6 page analysis paper that addresses the following:
Why did the insurance company raise the rates so much? How would you estimate a fair insurance rate?
From the perspective of the consumer, how were the paybacks structured and how might they be restructured to entice you at an equal or lower cost of insurance? How does the program influence your decision to purchase?
What are the common decision traps which each group in point (2) is susceptible to? Develop a matrix or decision tree in order to compare the groups. How does the program impact the consumer’s “regret”? (Hint: Map the possible outcomes for the consumer)
From either Toro’s or the insurance company’s perspective, how would you frame your argument to achieve your desired objective?
Was the program successful? Why or why not?
If you were Dick Pollick, would you repeat the program? Assume you manage the S’No Risk program and argue your case. To what biases are you susceptible in this case?
Assignment 2: LASA 1—The S’No Risk Program
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In xxx mid-eighties, the Toro company xxxxxxxx x promotion xx xxxxx xxxx blower purchasers could xxxxxx x portion xx xxxxx purchase xx the xxxx winter brought modest snowfalls. xxx xxxxxx xx xxxxx refund xxx tied xx snowfall xxxxxxx and so, the program xxx xxxx to xxxxxxx risks xxx uncertainties. You xxxx xxxxxxx xxxxx risks and xxxxxxx xxxx a variety xx perspectives. Review the xxxx study “The xxxx xxxxxxx S’xx Risk Program” by David E. xxxx xxxxxx from xxxx xxxxxx’x xxxxxxxx readings. Click xxxx xx xxxxxxxx the Toro Excel xxxxxxxxx which contains xxxx xxxxxxxx from xxx article; the exhibit xxxxxx xxxxx the tabs xxxx xxx xxxxxx of the worksheet. xxx xxxx tool to xxxxxxx xxxx data xxxxxxxx for xxxx xxxxxxxxxxxxx
xxxxxxx xxx xxxxx xx the program xxxx xxx xxxxxxxxx xxxxxx of view: 1.Toro
The xxxxxxx’x main business is selling xx snow throwing equipment’s. xxx xxxxxxx xxx xx continually look for aggressive xxxx xx improve xxxxx and xxxxxxxxx profitability. xxxxxxxx x’xx xxxx program
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