Tim Urban, owner/manager of Urbans Motor Court in Key West, is considering outsourcing the daily room cleanup for his motel to Duffys Maid Service. Tim rents an average of 50 rooms for each of 365 nights (365 × 50 equals the total rooms rented for the year). Tims cost to clean a room is $12.50. The Duffys Maid Service quote is $18.50 per room plus a fixed cost of $25,000 for sundry items such as uniforms with the motels name. Tims annual fixed cost for space, equipment, and supplies is $61,000. Which is the preferred process for Tim, and why?
Tim Urban, owner/manager of Urbans Motor Court in Key West, is considering outsourcing the daily room cleanup for his motel to Duffys Maid Service. Tim rents an average of 50 rooms for each of 365 nights (365 × 50 equals the total rooms rented for the year). Tims cost to clean a room is $12.50. The Duffys Maid Service quote is $18.50 per room plus a fixed cost of $25,000 for sundry items such as uniforms with the motels name. Tims annual fixed cost for space, equipment, and supplies is $61,000. Which is the preferred process for Tim, and why?