Consulting-On-the-Go is a consulting firm that sells three types of projects: simple, long, complex. Average price at
Question:
Consulting-On-the-Go is a consulting firm that sells three types of projects: simple, long, complex.
Average price at which these projects are sold to clients is $180,000, $300,000, and $350,000.
Each type of project requires an expected number of hours from a pool of freelancers, whose cost can be considered variable as the firm contracts them on a per-project basis. The following table summarizes the average cost and the number of hours required per type of freelance.
In addition, fixed costs for each type of project are, respectively, $30,000, $40,000, and $70,000.
1. What is the type of project that gives the highest average profit?
2. What is the most profitable type of project?
3. What would be the most profitable type of project if the project leader type were difficult to find (i.e., if the number of hours of project leaders were constrained)?
Step by Step Answer:
Practical Finance For Operations And Supply Chain Management
ISBN: 9780262043595
1st Edition
Authors: Alejandro Serrano, Spyros D. Lekkakos, James B. Rice