1. Jones Company wants to evaluate four new customer service software offerings. Tiger Bait has fixed costs of $575,000 and variable cost of $75. Mule Kick has greater fixed costs ($775,000) yet lower variable cost ($60). Eagle Eye comes in at $225,000 and $125 variable cost while Atlas Plus has a very high fixed cost of $900,000 but a variable cost of $55. The company plans to use the software for a long time but wants to make the best decision. Jones is uncertain about the volumes associated with each option. Find the crossover point for each of the four new customer service software offerings. Show a mathematical and graphical solution.
2. A company library uses an ABC inventory classification and has 100 books that are A items, 250 that are B items, and 1,400 that are C items. The library is open 200 days and in a year, counts A items a total of 10 times, B items 4 times, and C items 1 time. On the average, how many books are counted each day during the year?
3. Bob Jones wants to provide the highest customer service level to his clients but can only promise 97%. Bob performs maintenance on reef aquariums and given his school schedule, can service 4 aquariums per day but demand is variable at time indicated by a standard deviation of 2 days. He needs to buy a fairly expensive maintenance kit for the service and needs to set the reorder point. Lead time is 12 days. Help Bob by coming up with the reorder point for the maintenance kits.