Two-alternative cost analysis Leadlow University, a college of 12,000 students, uses a computer to process all student grades and to prepare student grade reports. The current term grades are added to a student master file which is loaded on tape. The updated master file tape is printed and the most current student record is filed, so that administrators and others may have access to current student records. Requests for student records data are processed manually. The appropriate data are copied and sent to the student, prospective employer, or other authorized people. The average number of inquiries for each student record has been rising from 2.2 per year five years ago to 3.5 per year last year. Increased competition for jobs is one reason for the increase in the use of student records, but there are probably other causes as well. The dean of students thinks the request for student records will level off at about 3.5 requests per student per year.

The rapidly rising cost of manually processing requests for student data has caused the university to evaluate data base management systems for managing student records. All student records could be loaded on the system and information requests could be satisfied easily and quickly. The alternatives have been narrowed to Maxi-Data and Data-Tron. Both systems are excellent and can easily satisfy the university's needs. Cost data for the two systems including the lease of a separate computer for the data base system are presented below.

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Maxi-Data Data-Tron Annual fixed costs: Lease cost.... Maintenance cost $24,000 $15,000 4,000 3,000 Insurance cost. 3,000 2,000 Occupancy costs 16,000 16,000 Variable cost per inquiry: Labor cost $1.50 $1.80 Supply cost .40 .45 Other variable costs .30 842 .20