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Susan is considering outsourcing daily room cleanup for her motel to Duffy's Maid Service. Susan rents the average of 50 rooms rented for each of 365 nights (365*50=total rooms rented for the year). Susan's cost to clean the room is 12.50. Duffy's quote is 18.50 per room plus fixed cost of the 25000 for sundry items such as uniforms with motel's name. Susan's annual fixed cost for space, equipment, and supplies is 61000. Which is the preferred process for the Susan, and why?

Operation Management, Management Studies

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