Susan Shi owns TestTutor, an educational tutoring center in Greenville, South Carolina. The center offers private tutoring in math, writing, and science. Information about the tutoring sessions is as follows:

Since the company opened five years ago, demand has grown faster than the supply of qualified tutors. Susan currently has enough tutors to provide only 420 hours of tutoring each week.

Required

a. Can Susan satisfy customer demand with her current supply of tutors? Why or why not?

b. How should Susan allocate the currently available tutor hours?

c. What total contribution margin will Susan earn based on your answer to (b)?

d. Susan has decided that instead of offering individualized instruction in math and science, she will switch to group sessions. Each math session will accommodate two students, and each science session will accommodate four students. Each student in the group will continue to pay the original session price. All sessions will have a single tutor, but each student will need supplies. How will this change in service delivery affect Susan’s ability to meet demand? How will it change her allocation of tutor hours?

e. Suppose Susan has enough tutors lined up to provide 600 hours of tutoring each week. However, the building she currently leases has no room for expansion; when fully scheduled, it can accommodate only 420 tutoring hours each week. What is the constrained resource? How can Susan overcome the constraint to meet the current demand for her services and provide room for future growth?

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Math Writing Science Session price Variable labor costs $34 $50 $25 20 30 10 Variable supplies cost Session length Number of sessions demanded per week 2 1 45 minutes 90 minutes 30 minutes 180 260 120