Lebron Waters has discovered a problem involving its mix of flavor to seltzer water that costs the company $3,000 in waste and $2,500 in lost business per period. There are two alternative solutions. The first is to lease a new mix regulator at a cost of $4,000 period, which would save $2,000 in waste and $2,000 in lost business. The second alternative is to hire an additional employee to annually monitor the existing regulator at a cost of $2,500 per period, saving $1,500 in waste and $1,800 in lost business per period.
Prepare a memo that evaluates the two alternatives. Which alternative should LeBron Waters choose?