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:
Total monthly cost
Total expected cost of plan
* Probability =
cost of orders
Answer rating: 100% (QA)
To calculate the total expected cost of each plan current plan partially automated B2B and fully aut...View the full answer