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.
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Chapter2: Introduction To Spreadsheet Modeling
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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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