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Keith Whittingham, as manager of designs by Whittingham, is upgrading his CAD software. The high performance (HP) software rents for $3,000 per month per workstation. The standard performance (SP) software rents for $2,000 per month per work station. The productivity figures that he has available suggest that the HP software is faster for his kind of design. Therefore, with the HP software he will need five dengineers and with the SP software he will need six. This translates into a variable cost of $200 per drawing for the HP system and $240 per drawing for the SP system. At his projected volume of 80 drawings per month, which system should he rent?

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Operation Management, Management Studies

Category:- Operation Management
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