Help the Chancellor of Fairman University to determine whether hospitality management should be dropped from the universitys academic program portfolio.

Internal Profit & Loss statement for the hospitality management shows that in the latest academic year tuition revenues earned totaled $320,000; operating expenses were faculty salaries, $215,000; supplies, $20,000, and other facility expenses, $175,000. Other facility expenses include $98,000 of general university overhead costs that are allocated to the program and $77,000 of salaries earned by office and support personnel.

Among other factors, the CFO expects the following if the major is discontinued:

One-fourth of the programs supplies cost cannot be saved.

Some students will change majors, but overall university enrollment will decline as other students transfer to other schools. Total lost tuition revenue is estimated at $195,000.

One of the office support employees (annual salary, $20,000) will be transferred to the school of professional psychology; other employees can be laid off.

Untenured faculty members with combined salaries of $170,000 can be dismissed. The tenured faculty will transfer to the general management department.

Equipment will be removed and transferred to the fine arts school. The vacated space can be converted to a weight and physical conditioning facility for student-athletes. This new facility may help attract better athletes and make the universitys athletic program more competitive.