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An "imperfect tester" problem involving the decision of how to produce batches of plastic strapping, given uncertainty about the length of the molecular chain in the raw material. A decision on whether to test the raw material and a choice of production process must be made; the latter choice, combined with the length of molecular chain, will affect costs and quality of output. For one process, there is additional uncertainty about pressure. Intended for use early in that portion of a decision theory course involving Bayes Theorem. Involves many decision theory techniques, and can also be used as an examination.

The use of preference theory facilitates more consistent decision making and helps management convey a better understanding of the desired corporate attitude toward risk taking. The process of obtaining decision makers' preference curves consists of two stages: 1) the assessment of preliminary curve, and 2) the verification and correction of that curve. Preference theory helps managers not only to enhance their own decision making, but also to gain insights into the thinking of other decision makers in the organization.