A real estate agent is considering changing her land line phone plan. There are three plans to choose from, all of which involve a monthly service charge of $20. Plan A has a cost of $.38 a minute for daytime calls and $.18 a minute for evening calls. Plan B has a charge of $.48 a minute for daytime calls and $.14 a minute for evening calls. Plan C has a flat rate of $75 with 250 minutes of calls allowed per month and a charge of $.36 per minute beyond that, day or evening. a. Determine the total charge under each plan for this case: 150 minutes of day calls and 70 minutes of evening calls in a month. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Cost for Plan A Cost for Plan B Cost for Plan C $ $ $ 89.60 101.80 95.00 b. If the agent will only use the service for daytime calls, over what range of call minutes will each plan be optimal? (Round each answer to the nearest whole number. Include the indifference point itself in each answer.) Plan A is optimal from zero to minutes. Plan C is optimal from minutes onward c. Suppose that the agent expects both daytime and evening calls. At what point (i.e., percentage of total call minutes used for daytime calls) would she be indifferent between plans A and B? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places. Omit the "%" sign in your response.)
A real estate agent is considering changing her land line phone plan. There are three plans to choose from, all of which involve a monthly service charge of $20. Plan A has a cost of $.38 a minute for daytime calls and $.18 a minute for evening calls. Plan B has a charge of $.48 a minute for daytime calls and $.14 a minute for evening calls. Plan C has a flat rate of $75 with 250 minutes of calls allowed per month and a charge of $.36 per minute beyond that, day or evening. a. Determine the total charge under each plan for this case: 150 minutes of day calls and 70 minutes of evening calls in a month. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Cost for Plan A Cost for Plan B Cost for Plan C $ $ $ 89.60 101.80 95.00 b. If the agent will only use the service for daytime calls, over what range of call minutes will each plan be optimal? (Round each answer to the nearest whole number. Include the indifference point itself in each answer.) Plan A is optimal from zero to minutes. Plan C is optimal from minutes onward c. Suppose that the agent expects both daytime and evening calls. At what point (i.e., percentage of total call minutes used for daytime calls) would she be indifferent between plans A and B? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places. Omit the "%" sign in your response.)
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Transcribed Image Text:Problem 5-6 (Algo)
A real estate agent is considering changing her land line phone plan. There are three plans to choose
from, all of which involve a monthly service charge of $20. Plan A has a cost of $.38 a minute for daytime
calls and $.18 a minute for evening calls. Plan B has a charge of $.48 a minute for daytime calls and $.14 a
minute for evening calls. Plan C has a flat rate of $75 with 250 minutes of calls allowed per month and a
charge of $.36 per minute beyond that, day or evening.
a. Determine the total charge under each plan for this case: 150 minutes of day calls and 70 minutes of
evening calls in a month. (Do not round intermediate calculations. Round your answer to 2 decimal
places.)
Cost for Plan A
Cost for Plan B
Cost for Plan C
$
$
$
b. If the agent will only use the service for daytime calls, over what range of call minutes will each plan be
optimal? (Round each answer to the nearest whole number. Include the indifference point itself in
each answer.)
Plan A is optimal from zero to
89.60
101.80
95.00
Point of indifference
minutes. Plan C is optimal from
c. Suppose that the agent expects both daytime and evening calls. At what point (i.e., percentage of total
call minutes used for daytime calls) would she be indifferent between plans A and B? (Do not round
intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places. Omit the
"%" sign in your response.)
minutes onward
percent daytime minutes
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