Question
Red star copy service processes 2,100,000 photocopies per month at its service center. Approximately 50 percent of the copies require collating. Collating is currently performed
Red star copy service processes 2,100,000 photocopies per month at its service center. Approximately 50 percent of the copies require collating. Collating is currently performed by college students at 9.00/hour. Each student collates 5000 copies per hour. Management is contemplating the lease of an automated collating machine that has a monthly capacity of 6,000,000 copies with a lease and operating cost totaling 1550.00 plus $0.05 per 1000 units.
determine the cost of collating 500,000 and 1,700,000 per month:
with student help
With automated collating machine
Determine the monthly volume at which the automatic process becomes preferable to the manual process.
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