CASE QUESTIONS

Provide responses, displaying all work, to the following questions:

1. What costs are relevant to each of the three alternatives: offshoring, relocating functions, and automating functions?

2. Based on Georges assumptions that all of the remaining supervisors costs are split 65% to accounts payable and 35% to bank reconciliation, and all incremental ongoing technology costs and postage costs are charged to accounts payable, calculate the annual savings per function through offshoring.

3. Using the information that Charleston gathered on electronic payment processing, determine the potential staff reduction and calculate the potential annual cost savings from electronic processing of 50% of the accounts payable checks.