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Walmart intends to improve the customer satisfaction through the addition of a self-checkout station to one of its stores. Two self-checkout machine vendors have presented proposals. The fixed cost for proposal A is $71500, and for B is $42300. The variable cost per customer for A is $1.1, and for B, $1.5. The monetary equivalent revenue generated by each customer using self-checkout is calculated to be $1.9. (Answer the followings using Excel Goal-Seek tool) a) What is the break-even point for each proposal? b) If the expected self-checkout volume is 98000 customers, which alternative should be chosen?

Operation Management, Management Studies

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