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.

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.