Problem 1: Brian Adams, the manager of the company Design-Plus is upgrading his ERP software. The high-performance software (ORACLE) can be rented for $3.000 per month per computer workstation. The standard-performance software (SAP) can be rented for $2,000 per month per computer workstation. The productivity figures that he has available suggest that the ORACLE software is faster for his kind of design. Therefore, with the ORACLE software he would needs engineers; whereas with the SAP software he would need 6 engineers. Each engineet requires one computer workstation. Please use a variable cost of $200 per drawing for the ORACLE system, and use $400 per drawing for the SAP system. You do NOT need to show your work. There is NO partial credits for any mistake (i.e., each answer is either right or wrong). Q.1.A. What is the point of Indifference in this problem? Q.1.B. At his projected volume of 68 drawings/month, which system should Brian Adams rent (ORACLE or SAP) to get the lowest total cost?
