To compare operational trade-offs, use only the figures the case gives, name what each option gains and gives up, and finish with a judgement that states its condition. This skill appears in the longer evaluation parts of a case question, where a firm must choose between two ways of working.
It draws on the three earlier lessons in technology, quality and sustainability and prepares you for case analysis and evaluation.
What makes a statistic “fake” in an answer?
A fake statistic is a number the case did not give and you did not calculate from it. Examples are “demand would grow 20%”, “customers would pay 10% more” or “waste would halve”.
These can look precise, but they are guesses. An evaluation is judged on how well you use the evidence supplied, so a guessed figure weakens it. Use words such as “if demand grew” or “this depends on” instead.
How do you build a trade-off comparison?
- List the options the case offers.
- Calculate from the case: monthly cost, saving, payback.
- List non-numerical gains and costs for each: flexibility, jobs, quality, risk, reliance on repairs.
- Say what is unknown. Mark the missing information clearly.
- Judge with a condition: “better if…” or “worth it provided…”.
Worked example
Perabot Jati Sdn Bhd in Muar sands wooden chairs by hand. Two workers do this, each paid RM1,800 a month.
A sanding machine costs RM48,000 and RM900 a month to run. The case also says the firm gets steady orders and that the machine needs a trained operator who is not currently employed.
Step 1, wages saved: 2 × 1,800 = RM3,600 a month.
Step 2, net saving: 3,600 − 900 = RM2,700 a month.
Step 3, payback: 48,000 ÷ 2,700 = 17.78, so about 17.8 months, which is just under 18 months.
Step 4, gains not in money: a machine can sand to a more even finish and does not tire. Output could rise, but the case gives no figure, so we cannot say by how much.
Step 5, costs and risks: two workers may lose their jobs, which affects morale. The firm needs an operator, and a breakdown could stop sanding altogether.
Step 6, unknowns: the cost of the new operator, the machine’s lifespan and whether demand stays steady.
Step 7, judgement: the machine looks worthwhile if orders remain steady for well over 18 months and the operator cost does not erase the RM2,700 saving. Without that information, the firm could trial the machine on part of its output first.
Every number in the working came from the case. The unknowns were named, not filled in.
The mistake to watch for
A common slip is to support a recommendation with an invented number.
Mistaken answer: “The machine will increase output by 30%, so the firm should buy it.”
The 30% appears nowhere in the case. If the examiner looks for evidence, there is none.
The correction is: “The machine could raise output because it does not tire, but the case gives no figure, so the firm should find out how much faster it is before deciding.”
Check yourself
Try these on paper, then open each answer.
1. Which part of this sentence is an invented statistic? “The new delivery van will cut late deliveries by 40%, and its cost of RM60,000 is shown in the case.”
Show answer
The 40% cut in late deliveries. It is not in the case. The RM60,000 cost is given, so it can be used.
2. A machine costs RM30,000 and gives a net saving of RM2,500 a month. What is the payback period?
Show answer
30,000 ÷ 2,500 = 12 months.
3. A case gives the machine’s cost and the wages saved, but not the expected demand. Write one conditional sentence for the recommendation.
Show answer
For example: “The machine is worth buying if demand stays high enough to keep it in regular use, because the saving only arrives when it is used.” Any sentence that names a condition and a reason is acceptable.
Where this leads next
With the habit of conditional judgement, check which course your exam year follows in the 2027 requirement lesson, then try the mixed practice set. The cash versus profit bridge helps you separate the cash paid for a machine from its effect on profit.
Students who calculate well sometimes lose the evaluation marks by guessing. Our teachers coach this balance in online one-to-one Business tuition.