Tim Urban, owner/manager of Urban’s MotorCourt in Key West, is considering outsourcing the daily roomcleanup for his motel to Duffy’s Maid Service. Tim rents anaverage of 50 rooms for each of 365 nights (365 3 50 equalsthe total rooms rented for the year). Tim’s cost to clean aroom is $12.50. The Duffy’s Maid Service quote is $18.50 perroom plus a fixed cost of $25,000 for sundry items such asuniforms with the motel’s name. Tim’s annual fixed cost forspace, equipment, and supplies is $61,000. Which is the preferred process for Tim, and why?

Tim Urban, owner/manager of Urban’s MotorCourt in Key West, is considering outsourcing the daily roomcleanup for his motel to Duffy’s Maid Service. Tim rents anaverage of 50 rooms for each of 365 nights (365 3 50 equalsthe total rooms rented for the year). Tim’s cost to clean aroom is $12.50. The Duffy’s Maid Service quote is $18.50 perroom plus a fixed cost of $25,000 for sundry items such asuniforms with the motel’s name. Tim’s annual fixed cost forspace, equipment, and supplies is $61,000. Which is the preferred process for Tim, and why?

Name: Tim Urban, owner/manager of Urban’s MotorCourt in Key West, is conside
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Description: Tim Urban, owner/manager of Urban’s MotorCourt in Key West, is considering outsourcing the daily roomcleanup for his motel to Duffy’s Maid Service. Tim rents anaverage of 50 rooms for each of 365 nights (365 3 50 equalsthe total rooms rented for the

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

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Tim Urban, owner/manager of Urban's Motor Court in Key West, is considering outsourcing the daily room cleanup for his motel to Duffy's Maid Service. Tim rents an average of 50 rooms for each of 365 nights (365 × 50 equals the total rooms rented for the year). Tim's cost to clean a room is $12.50.The Duffy's Maid Service quote is $18.00 per room plus a fixed cost of $26,000for sundry items such as uniforms with the motel's name. Tim's annual fixed cost for space, equipment, and supplies is $65,000. Part 2 Based on the given information related to costs for each of the options, the crossover point for Tim = room nights (round your response to the nearest whole number). Part 3 If the number of room nights is less than the crossover point, then is the best option available to Tim.
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Tim Urban, owner/manager of Urban's Motor Courtin Key West, is considering outsourcing the daily room cleanupfor his motel to Duffy 's Maid Service. Tim rents an average of50 rooms for each of 365 nights (365 X 50 equals the total roomsrented for the year). Tim's cost to clean a room is $12.50. TheDuffy's Ma id Service quote is $18.50 per room plus a fixed costof $25,000 for sundry items such as uniforms with the motel'sname. Tim's annual fixed cost for space, equipment, and suppliesis $6 1,000. Which is the preferred process for Tim, and why?
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