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