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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
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 $2,500,000 per month and $45 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 $12,500,000 per month and a variable cost of $25 per order. The fully automated B2B system has a fixed cost of $27,500,000 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:
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