Answered step by step
Verified Expert Solution
Question
1 Approved Answer
4. A national call-centre is trying to decide how to best invest in upgrad- ing their internet infrastructure at a cost of $2 million
4. A national call-centre is trying to decide how to best invest in upgrad- ing their internet infrastructure at a cost of $2 million dollars. With the current infrastructure there is a 10% chance of latency and discon- nections mid-consultation while using the WiFi connection during the year. Latency and lost connections ultimately result in an annual loss of $3 million revenue to the business due to decreased productivity. On the other hand, with the relevant upgrades, the probability of such outages each year reduces to 2%. In either case the business pays for the upgrades through an increase in costs to the consumer in the first year. Additionally, if the upgrades are performed and no outages oc- cur in a given year then revenue will increase by $1 million as a result of increased productivity and consumer confidence in the business. (a) Construct a table showing the call-centre's options and possible outcomes after one year. (b) In the short term (one year) is it better for the business to invest or not invest in upgrading the power infrastructure? (c) What about over five years?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started