Hyewon Kim owns her own catering business. She continually monitors her other expense costs, including the cost of liability insurance for drivers of her catering vans. This year, Hyewon’s auto insurer advises her that insurance rates for her coverage will increase by 15 percent next year. The insurance company also states that if Hyewon will institute a preemployment drug-testing program for those employees who will drive her vans, there will be no insurance rate increase. Hyewon does not currently require potential employees to agree to be drug-tested prior to becoming employed in her business, but it is legal to do so in her state. What should Hyewon tell potential employees about her reason for implementing a preemployment drug-testing program? What should she do if a potential employee refuses to agree to the test?

Hyewon Kim owns her own catering business. She continually monitors her other expense costs, including the cost of liability insurance for drivers of her catering vans. This year, Hyewon’s auto insurer advises her that insurance rates for her coverage will increase by 15 percent next year. The insurance company also states that if Hyewon will institute a preemployment drug-testing program for those employees who will drive her vans, there will be no insurance rate increase. Hyewon does not currently require potential employees to agree to be drug-tested prior to becoming employed in her business, but it is legal to do so in her state. What should Hyewon tell potential employees about her reason for implementing a preemployment drug-testing program? What should she do if a potential employee refuses to agree to the test?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section: Chapter Questions

Problem 36P

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