10) Your laundry contract is due for renewal. You\'re concerned about stained li
ID: 425260 • Letter: 1
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10) Your laundry contract is due for renewal. You're concerned about stained linen with the current company and delivery times have been inconsistent. A potential new company provides a proposal. Your current company is worried you will exit the contract, so their area VP makes a plan of action to address your concerns. Based on the following information, what decision would you make? Please include any calculations you used to make your decision Sonder: 40% King beds 60% Queen beds King checkout weight: 14 lbs Queen checkout weight: 12.8 lbs Each checkout produces 1 duvet cover per bedroom Average bedrooms per unit: 1.45 Average checkouts per unit per month: 6 Total Units: 200 *We plan to grow by 50 units per month Partner 1- Price per pound: $.37 Piece pricing (duvet covers only): King - $3.50 Queen $3.50 At 300 units, the partner will discount the poundage and peice prices by 2.5% At 500 units, the partner will discount the poundage and peice prices by an additional 2.5% Partner 2 (potential new partner) Price per pound: $.38 Piece pricing (duvet covers only): King - $3.15 Queen $2.65 No discount offered due to growth Must sign 36 month contractExplanation / Answer
Total checkouts for the first month are=200*1.45*6=1740 checkouts
Number of king bed covers for first month= 1740*0.4*= 696
Number of Queen bed covers for first month= 1740*0.6= 1044
Total pounds for first month= 696*14+ 1044*12.8= 9744+13363.2=23107.2 pounds
Total cost according to partner 1= 1740*3.5 + 23107.2*.37= 14639.6
Total cost according to partner 2 =696*3.15 + 1044*2.65 + 23107.2*.38= 13739.7
Initially, partner 2 is cheaper for first month but it has contract for 36 months, in that time the units will rise to 200+550+600+600= 1950
And after crossing 500 units the partner 1 will charge .351 per pound and 3.32 per cover which will certainly cost less than the new partner just after 7 months, hence I will stick to partner 1.
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