Bargainmart is an international retail store. Bargainmart's managers are considering implementing a new business-to-business (B2B) information...

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Bargainmart is an international retail store. Bargainmart's managers are considering implementing a new business-to-business (B2B) information system for processing merchandise orders. The current system costs Bargainmart $2,000,000 per month and $40 per order. Bargainmart has two options, a partially automated B2B and a fully automated B2B system. The partially automated B2B system will have a fixed cost of $8,000,000 per month and a variable cost of $25 per order. The fully automated B2B system has a fixed cost of $17,600,000 per month and a variable cost of $15 per order. Based on data from the past 2 years, Bargainmart has determined the following distribution on monthly orders: Current plan Total monthly cost of orders Order level 400,000 orders 600,000 orders 800,000 orders Total expected cost of plan * Probability = = Total expected cost of orders A Bargainmart is an international retail store. Bargainmart's managers are considering implementing a new business-to-business (B2B) information system for processing merchandise orders. The current system costs Bargainmart $2,000,000 per month and $40 per order. Bargainmart has two options, a partially automated B2B and a fully automated B2B system. The partially automated B2B system will have a fixed cost of $8,000,000 per month and a variable cost of $25 per order. The fully automated B2B system has a fixed cost of $17,600,000 per month and a variable cost of $15 per order. Based on data from the past 2 years, Bargainmart has determined the following distribution on monthly orders: Current plan Total monthly cost of orders Order level 400,000 orders 600,000 orders 800,000 orders Total expected cost of plan * Probability = = Total expected cost of orders A

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To calculate the total expected cost of each plan current plan partially automated B2B and fully aut... View the full answer