There are several ethical dilemma’s created by the decision to charge all customers the high end of the warranty expenses. On the plus sizes, Bly is consistent in that he charges all of the customers the same amount. To that end, he is ensuring that his customers all receive fair and equal treatment. However, the customers should have the right to pay the most current percentage. Bly must spend time with his accountant to determine the fairest value. Ethical decision making is essential to building the trust of the customers.
It is possible that the customers could find out that Bly is charging them an additional 7% in warranty costs, and that they could have paid less for their warranty elsewhere. As a result, Bly may not experience the customer retention that other businesses who charge a more moderate level price will experience, and this could negatively effect business. b. Since warranty expenses vary, what percent do you think Bly should choose for the current year?
Justify your response. In order to determine the best percentage, Bly should conduct a market survey of what the other dealerships in the local area, and, possibly, nationwide, are charging. Bly should attempt to be competitive in the amount that he charges his customers. It is possible to be conservative and not rip the customers off. Because of this, Bly should consider charging a high end average of the going rates, which would mean charging a percentage of 7-8%.