Following are some points to consider:
1. Time frame for the implementation is three years.
2. Via implementation of the proposed system ECI’ management looks to cut two low-level assistant’ position – for total saving of $70,000 in salaries.
3. New position of the System Administrator will be established, but you need to determine the feasible amount that could be allocated towards the salary. Consider yearly raises of 4% to account for the increases in the cost of living.
4. Currently, ECI employs seven car mechanics; average salary of each is $65,000. ECI charges its customers an hourly labor rate of $125. No more than five cars could be maintained simultaneously. Each of the five bays costs $500 per day to operate.
5. ECI values each customer based on the premise that every customer brings $15,000 of net revenue per year.
6. Any acquired for ECI’ inventory item (e.g., car, part, etc.) must bring at least 15% of the profit.
7. A cost of a delay of inventory acquisition has been estimated at $800 per day.
8. A cost of a delay in maintenance has been estimated at $350 per day.
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