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Is $80,000 Enough Exercise You manage the sales and marketing department at a company that generates $100 million in sales—a manufacturer of fireplace inserts and related equipment. Assume you just started the job and that at the end of your second day the corporate operations officer (COO) sticks her head into your office and announces, “I’m in a rush and have to go, but I wanted to let you know that I put $80,000 in the budget for computers for your department next year. Is that OK? Unfortunately, I’ve got to know by the day after tomorrow. Thanks.” How do you respond? You have 2 days to decide. If you agree to the $80,000 and it turns out to be insufficient, then sometime next year your department will lack computing resources and you’ll have a management problem. If that happens, you may have to spend over your budget. You know that cost control is important to your new employer, so you dread overspending. However, if you ask for more than $80,000, you need to justify why you need it. You will need to document the computer equipment and software your department needs, explain why you need it, and estimate how much it will cost. Here is what you know so far: •The IT Department will be upgrading all of your department’s computers to Windows 10 and Office 2019 in the next year. IT has negotiated a site license for these products, and then allocates that license cost to each computer. For your department, you will pay $100 for each computer that uses Office 2019and another $75 for each computer that uses Windows 10. •You are not required nor allowed to buy any software for new computers. If the computer comes with software, that software will be destroyed by the IT department’s standard installation process. •The IT department assesses each computer an annual $1,200 fee for network, server, and other overhead costs. •You are required to buy the new computers and equipment from Dell, HP, or Lenovo •You have identified three classes of computer users in your department. The minimum main memory, RAM, and disk storage requirements for each class of user are shown in Figure 4-19. •Figure 4-20 shows the job titles of employees in your department, the number of employees of each type, the class of computer they require, and whether they use a desktop or a laptop. (You are a new employee, do not yet have a computer, and can specify your own requirements.) •Assume that telesales personnel will grow by 10 percent in the next year but there will be no other changes in the number of personnel in your department. Tasks: a). Given this data, is $80,000 enough? If not, how much money should be allocated in your department? Write a brief answer for your boss. b).Develop an Excel Spreadsheet and use formulas to assist you with this analysis. Remember you will have to give this spreadsheet to your new boss so make it professional. You will also want to save this spreadsheet so that you will have documentation of your decisions. The next time you have to make this decision you will have a record of your analysis.

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Answer for COO:
The business analysis reveals the allocated budget of $80,000 suffices for accomplishing the established goal of upgrading all computers to Windows 10 and Office 2019 in the incoming year. The details of the calculations can be also reviewed in Fig.1, but also in the Excel file which is attached in the final folder. All new computers to be purchased are produced by Dell or Lenovo (laptops) and satisfy the hardware requirements identified during the analysis (for types A, B, and C). It was decided that the computer which will be used by the Sales & Marketing Manager belongs to type A....

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