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Travis Inc. and Victory Inc. are two small clothing companies that are considering leasing a dyeing machine together. The companies estimated that in order to
Travis Inc. and Victory Inc. are two small clothing companies that are considering leasing a dyeing machine together. The companies estimated that in order to meet production, Travis needs the machine for 900 hours and Victory needs it for 650 hours. If each company rents the machine on its own, the fee will be $70 per hour of usage. If they rent the machine together, the fee will decrease to $65 per hour of usage. Read the Requirements 1. Calculate Travis's and Victory's respective share of fees under the stand-alone cost-allocation method. 2. Calculate Travis's and Victory's respective share of fees using the incremental cost-allocation method assuming (a) Travis ranked as the primary party and (b) Victory ranked as the primary party. 3. Calculate Travis's and Victory's respective share of fees using the Shapley value method. 4. Which method would you recommend Travis and Victory use to share the fees? Requirement 1. Calculate Tupper's and Vesser's respective share of fees under the stand-alone cost-allocation method. (Do not round intermediary calculations. Only round the amount you input in the cell to the nearest dollar.) Requirement 2. Calculate Tupper's and Vesser's respective share of fees using the incremental cost-allocation method assuming (a) Tupper ranked as the primary party and (b) Vesser ranked as the primary party. (Do not round intermediary calculations. Only round the amount you input in the cell to the nearest dollar.) Requirement 3. Calculate Tupper's and Vesser's respective share of fees using the Shapley value method. (Do not round intermediary calculations. Only round the amount you input in the cell to the nearest dollar.) Requirement 4. Which method would you recommend Tupper and Vesser use to share the fees? I would recommend the It is fairer than the which . Given its simplicity, the is likely more acceptable. incremental method incremental method or the Shapley method incremental method or the stand-alone method Shapley method Shapley value method or the stand-alone method stand-alone method incremental method Shapley value method stand-alone method does not name a user and allocates the common costs randomly names a primary user and allocates less of the common costs to that user names a primary user and allocates more of the common costs to that user incremental method Shapley value method stand-alone method
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