Software Solution (SOS) helps subscribers solve software problems. All transactions are made over the telephone. For the

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Software Solution (SOS) helps subscribers solve software problems. All transactions are made over the telephone. For the year 2009, 10 engineers, most of whom are recent graduates, handled 100,000 calls. The average yearly salary for software engineers was $45,000. Starting in 2010, the firm retained and hired only software engineers with at least two years of experience. SOS raised the engineers' salary to $60,000 per year. In 2010, eight engineers handled 108,000 calls.


20062007
Number of calls handled 100,000 108,000
Engineers' salary $ 45,000 $ 60,000
Number of engineers 10 8


Required

1. Calculate the partial operational productivity ratio for both years.

2. Calculate the partial financial productivity ratio for both years.

3. Did the firm make the right decision to hire only software engineers with at least two years' experience?

4. List other factors that should be considered in making the decision.

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Cost management a strategic approach

ISBN: 978-0073526942

5th edition

Authors: Edward J. Blocher, David E. Stout, Gary Cokins

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