A property title search firm is contemplating using online software to increase
ID: 409265 • Letter: A
Question
A property title search firm is contemplating using online software to increase its search productivity. Currently an average of 45 minutes is needed to do a title search. The researcher cost is $1.80 per minute. Clients are charged a fee of $600. Company A's software would reduce the average search time by 8 minutes, at a cost of $3.60 per search. Company B's software would reduce the average search time by 9 minutes at a cost of $5.80 per search. Calculate the productivity in terms of revenue per dollar of input. (Round your intermediate calculations and final answers to 2 decimal places. Omit the "$" sign in your response.) Which option would have the highest productivity in terms of revenue per dollar of input?Explanation / Answer
a) Approach Average Time Cost Productivity per Dollar Input Current 45 : 45 × $1.8 = $81.00 $600/$81.00 = $7.41
Company A : 37 × $1.8 + $3.6 = $70.20 $600/$70.20 = $8.55
Company B : 36 × $1.8 + $5.8 = $70.60 $600/$70.60 = $8.50
property title search firm is contemplating using online software to increase its search productivity. Currently an average of 45 minutes is needed to do a title search. The researcher cost is $1.8 per minute. Clients are charged a fee of $600. Company A’s software would reduce the average search time by 8 minutes, at a cost of $3.6 per search. Company B’s software would reduce the average search time by 9 minutes at a cost of $5.8 per search.
so the Revenue will be :
b) Company A have highest productivity in term of revenue per doller of Input
Approach Average Time Cost Productivity (Revenue per Doller) Current 45 45 × $1.8 = $81.00 $600/$81.00 = $7.41 Company A 37 37 × $1.8 + $3.6 = $70.20 $600/$70.20 = $8.55 Company B 36 36 × $1.8 + $5.8 = $70.60 $600/$70.60 = $8.50