Alpha Software Ltd. (ASL) maintains a team of ten (10) high quality resource professionals called “warriors”. They are multi-skilled individuals who can be deployed on any client engagement as critical resources for short duration. The details of billing rate and cost structure of this team are as follows:

1. Billing rate per person = 25000 fixed + 1000X, where X = number of days of engagement
2. ASL’s variable costs per person = 400X, where X = number of days of engagement
3. ASL’s fixed overheads per month for maintaining this team = 100,000

1. In a particular month, ASL received a request that would require 5 resource persons for 4 days each. No part deployment was possible. Based on the resource planning, ASL could deploy 3 resource persons during this period of requirement but had to meet the shortage in one of the following options (no part withdrawal was possible):

1. Cancel 2 contracts each for 1 resource person for 6 days
2. Cancel 1 contract for 3 resource persons for 3 days

3. The best option is

   Reason(s)

   Assume that ASL decided to accept the request for 5 resource persons for 4 days each and cancelled one of the options as per question 1 selected by you. Further assume that 3 resource persons available would not be deployed if ASL did not accept the request. What is the lowest quote that ASL should charge for this request?

   The lowest quote to be charged