Question

A company sells medical supplies to hospitals and healthcare facilities that are mostly located in the Michiana region. The company has 150 employees, and it is about to decide whether part of them should be encouraged to work remotely, and if so, how many employees should do that. There are many aspects to be analyzed such as productivity and collaboration, but you will focus on the costs of space and IT at the company’s main office versus the costs of working remotely.

The costs of office space include building rent and maintenance, utilities, cleaning, and insurance. The company estimates that those costs could be either one of three scenarios: (A) $60,000 per month for a building where all employees can be accommodated; (B) $50,000 per month for a building that can accommodate 100 employees; or (C) $40,000 per month for a building for 50 employees.

The main costs of IT include the lease, operation and maintenance of equipment (a desktop computer for each employee, and the office’s Wi-Fi access points, cabling, routers for the LAN/MAN) and a contract with a fixed Internet service provider. The equipment cost is $7,500 per month for scenario (A), $5,500 for (B) or $3,500 for (C). The cost with the fixed Internet service provider is (A) $5,000 per month for all employees; (B) $4,000 per month for 100 employees; or (C) $2,500 per month for 50 employees.

If some of the employees no longer work frequently at the central office, then the company can operate on a smaller office (i.e. B or C instead of A). On the other hand, the company will provide a laptop, smartphone and a cellular plan for each employee working remotely. The company already has a corporate cellular contract with Cerizon for some employees. If some employees are to work remotely, then the company will add them to the same contract. The contract includes the smartphones at no extra cost, and Cerizon charges $10 per GB for employees who use less than 5GB per month, $8 per GB for employees who use 5GB or more but less than 10GB per month, and $6 per GB for employees who use 10GB or more per month. The cost of each laptop is $1,000, which the company considers that depreciates linearly over its lifetime of 2 years.

What are the office and remote costs in scenarios (A), (B) and (C)? For the scenario with the lowest total cost, which employees should work remotely? The IT department has a table with the average data traffic of fixed Internet for each employee. Assume that an employee working remotely would have 60% of his/her fixed Internet traffic added to the corporate cellular plan (the remaining 40% would use the employee’s home Internet, hotel, etc., at no cost for the company). write about the high art in music

Answer 1

It seems that the detail of average data traffic of fixed internet for each employee is available however it is not provided to us. In absence of such information we have to make suitable assumption as under :

"The remote staff is using 10GB data on an average per month"

In view of this 60% i.e. 6GB data would be charged to company. The usage of 6 GB data have cost of $8 per GB

Below table indicate that Option C is having least cost hence 50 employee should work from office while 100 employee should work remotely :

Cost of office	Option A	Option B	Option C
Rent	60,000.00	50,000.00	40,000.00
Equipment Cost	7,500.00	5,500.00	3,500.00
Cost of fixed internet service provider	5,000.00	4,000.00	2,500.00
Total cost for Office (A)	72,500.00	59,500.00	46,000.00
Cost for remotely working
Cost of Laptop	-	2,083.33	4,166.67
Data Charges	-	2,400.00	4,800.00
Total cost for staff working remotely (B)	-	4,483.33	8,966.67
Total Cost (A+B)	72,500.00	63,983.33	54,966.67

Laptop Depreciation Per Month
Cost of Laptop (a)	1,000.00
Life (Months) (b)	24.00
Depreciation per Month (c=a/b)	41.67
Cost for Option B (c*50)	2,083.33
Cost for Option C (c*100)	4,166.67
Cost of Data Per Month (Assumption in absence of data)
Average Data usage per employee	10.00
60% Data usage expected to be charged (d)	6.00
Cost per GB (e )	8.00
Cost for Option B (d*e*50)	2,400.00
Cost for Option C (d*e*100)	4,800.00