Whether the offer should be accepted or not.

Question

BPO Services is in the business of digitizing information from forms that are filled out by hand. In 2006, a big client gave BPO a distribution of the forms that it digitized in house last year, and BPO estimated how much it would cost to digitize each form. Form Type Mix of Forms Form Cost A 0.2 $0.80 B 0.2 $0.40 C 0.2 $0.40 D 0.2 $1.60 E 0.2 $0.80 The expected cost of digitizing a form is $__________- . Suppose the client and BPO agree to a deal, whereby the client pays BPO to digitize forms. The price of each form processed is equal to the expected cost of the form that you calculated in the previous part of the problem. Suppose that after the agreement, the client sends an equal mix of forms of types D and E only. The expected digitization cost per form of the forms sent by the client is $___________ . This leads to an expected loss of $__________ per form for BPO. (Hint: Do not round your answers. Enter the loss as a positive number.)

Answer 1

Question

Chapter 13, Problem 5PA

To determine

Whether the offer should be accepted or not.

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BPO Services is in the business of digitizing information from forms that are filled out by hand. In 2006, a big client gave BPO a distribution of the forms that it digitized in house last year, and BPO estimated how much it would cost to digitize each form. Form Type Mix of Forms Form Cost A 0.2 $0.80 B 0.2 $0.40 C 0.2 $0.40 D 0.2 $1.60 E 0.2 $0.80 The expected cost of digitizing a form is $__________- . Suppose the client and BPO agree to a deal, whereby the client pays BPO to digitize forms. The price of each form processed is equal to the expected cost of the form that you calculated in the previous part of the problem. Suppose that after the agreement, the client sends an equal mix of forms of types D and E only. The expected digitization cost per form of the forms sent by the client is $___________ . This leads to an expected loss of $__________ per form for BPO. (Hint: Do not round your answers. Enter the loss as a positive number.)

Apply your understanding in the evolution of the market in the computer industry

How do you think the supply chain expanded into an online business can improve the performance of the company?