A news clipping service is considering modernization. Rather than manually clipping and photocopying articles of interest and mailing them to its? clients, employees electronically input stories from most widely circulated publications into a database. Each new issue is searched for key? words, such as a? client's company? name, competitors'? names, type of? business, and the? company's products,? services, and officers. When matches? occur, affected clients are instantly notified via an online network. If the story is of? interest, it is electronically? transmitted, so the client often has the story and can prepare comments for? follow-up interviews before the publication hits the street. The manual process has fixed costs of $420,000 per year and variable costs of $6.40 per clipping mailed. The price charged to the client is $10.00 per clipping. The computerized process has fixed costs of ?$1,400,000 per year and variable costs of $2.30 per story electronically transmitted to the client.
If the same price is charged for either? process, what is the annual volume beyond which the automated process is more? attractive?
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