RDS Management has put together Figure 1, outlining the yearly costs associated with its current support desk operations as well as the three (3) companies being considered.

Question 1

A)Using Figure 1, complete a total cost analysis based on the comparison chart. This will require you to calculate all associated costs for the current support desk as well as the three (3) proposals.

B)After you have completed your calculations, please SCORE (from 1 to 5) the 3 proposals (Figure 2).

Figure 1: Yearly Costs of the Present and Proposed Contact (Call) Centre Alternatives

	Current Support Desk Costs	Company A Proposal	Company B Proposal	Company C Proposal
Personnel Costs	42 full-time equivalent (FTE) technical experts @ $56,000 per year (salary and benefits) 2 supervisors @ $75,000 per year (salary & benefits)	$2,600,000 per contract year (covers all administration and personnel requirements)	$2,100,500 per contract year (covers all administration and personnel requirements)	40 full-time equivalent (FTE) technical experts @ $52,500 per year (salary and benefits) 2 supervisors @ $75,000 per year (salary & benefits)
Equipment Costs	3 servers @ $11,000 each per year 28 PCs @ $650 each per year	$60,000 per contract year (covers dedicated usage of 5 servers and 40 PCs)	4 servers @ $8,000 each per year 30 PCs @ $750 each per year	$67,500 per contract year (covers dedicated usage of 5 servers and 30 PCs)
Variable Costs	$1.13 per contact (office supplies, fax paper, etc.). Use 800,000 contacts per year.	$1.05 per contact Use 800,000 contacts per year.	$1.14 per contact Use 800,000 contacts per year.	$1.02 per contact Use 800,000 contacts per year.

Figure 2: Scoring Scheme 5 = excellent 4 = good 3 = average 2 = fair 1 = poor