Process and Technology Keisha has been inundated with product-of-the-month offer

Question

Process and Technology

Keisha has been inundated with product-of-the-month offers from various marketing companies. She is considering joining a club that allows DVDs to be downloaded from a members-only Web site, but can’t decide which membership offers the best deal. Given the cost information below, which club would you recommend for Keisha? Why?

Any real world examples that you can add would be great also. Feel free to use Excel spreadsheets / graphs but they are not required. Not all the information is provided on purpose for this example. Not all information is provided on purpose, please work through it in your own manner.

Club Membership fee yearly Cost per DVD rental Almost free flicks $40 $5 Best movies $65 $4 Choice cinemas $100 $3

Explanation / Answer

The best rental plan will depend on how many DVDs does Kesha rent in a year. Let's work out the ranges.

assuming that x DVDs are rented each year

Cost of plan A: Almost free flicks = $40+5x

Cost of plan B: Best movies = $65+4x

cost of Plan C: choice cinemas = $100+3x

it is obvious that Plan A will be needed for less number of DVDs, Plan B for greater number and Plan C for the highest number of DVDs.

When would we select plan A -

40+5x < 65+ 4x => x < 25

When would we select plan B -

65+4x < 100+3x => x < 35

So,

Keisha should choose Almost free flicks if he/she plans to rent fewer than 25 DVDs in a year, should choose Best movies if plan to rent beteen 25 and 35 DVDs a year and should go for Choice cinemas plan is to rent moe than 35 DVDs a year

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