Considering outsourcing the daily room cleanup

Assignment Help Operation Management

Reference no: EM132110357

The owner of a motel is considering outsourcing the daily room cleanup to Duffy’s Maid Service. The manager rents an average of 50 rooms for each of 365 nights. The owner’s cost to clean a room is $12. The Duffy’s Maid Service quote is $18 per room plus a fixed yearly cost of $24,000 for sundry items such as uniforms with the motel’s room. The owner’s fixed cost for space, equipment, and supplies is $60,000 per year.

(a) What is the break-even quantity in terms of the total number of rooms to clean each year?

(b) Which option should be chosen and why?

Reference no: EM132110357

Questions Cloud

Accurately reflects the full intention of the parties : A good contract is well organized and clearly written and accurately reflects the full intention of the parties.

Project manager in dealing with diversity-cultural issues : What is the hazard safety requirements for dixions and furans? Discuss the role of the project manager in dealing with diversity and cultural issues.

Bottleneck operation should process batch size be large : In general, at a bottleneck operation should the process batch size be large or small? Explain.

Celebrex from the market as precautionary measure : Should Pfizer withdraw Celebrex from the market as a precautionary measure?

Considering outsourcing the daily room cleanup : The owner of a motel is considering outsourcing the daily room cleanup to Duffy’s Maid Service.

What is the firm inventory turnover : What is the firm’s inventory turnover? What is the weeks-of-supply of the firm?

Just physical world to offering goods or services online : Effects become increasingly difficult to evaluate when a business moves from being in just the physical world to offering its goods or services online.

Criterion weight location : The locations are rated based on a 1-5 scale, with 5 being the most satisfactory. Which location should the company choose?

Ethnic-cultural identity should be considered when doing : Communication is primarily concerned with ________________. Ethnic-cultural identity should be considered when doing ______________.

User Account

All Pages