Mishawaka Sales Company (MSC) is a direct marketing company involved in sales and distribution of a range of products in the Mid-West. MSC wants to provide better operational support to its sales representatives (SR) by providing each of its 800 SRs a laptop computer. The lifespan of each laptop is assumed to be five years with zero residual value and the cost of each laptop is $1,200. Each laptop needs operational software worth $300 in the beginning. Second year onwards, each laptop will need software upgrades costing $100 per laptop each year. Each SR needs to enroll in an initial training program costing $200 per SR. From the second year onwards, each SR will need to get annual training costing $50 per year. Based on historical data, MSC knows that 2% of laptops will need repair every year and the cost of a laptop repair is $700 per incident.

Directions:

• Determine the total cost of ownership (TCO) for this operational automation project at MSC over the lifespan of laptops.
• To find the TCO, setup and format an Excel spreadsheet where one can easily see the data/assumptions above, calculations of totals of the various cost components, and final result.
• Your spreadsheet must allow us to easily investigate changes in assumptions on TCO. For example, we should be able to know how TCO changes if we have 750 SRs instead of 800, by changing a single value in the spreadsheet.
• Submit your spreadsheet on canvas by the end of class.

Important components of IS model include hardware, software, networking, people, and data. The total cost of information systems in an organization is the sum of the cost of each component of this IS model.