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?
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?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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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 X 50 equals the total rooms rented for the year). Tim's cost to clean a room is $12.50. The Duffy's Ma id Service quote is $18.50 per room plus a fixed cost of $25,000 for sundry items such as uniforms with the motel's name. Tim's annual fixed cost for space, equipment, and supplies is $6 1,000. Which is the preferred process for Tim, and why? |
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