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April 20, 2014

Homework Help: management science

Posted by Lisa on Saturday, October 27, 2012 at 8:15pm.

Kim Davis has decided to purchase a cellular phone, but she is unsure about which rate plan to select. The "regular" plan charges a fixed fee of $55 per month for 1,000 minutes of airtime plus $0.33 per minute for any time over 1,000 minutes. The "executive" plan charges a fixed fee of $100 per month for 1,200 minutes of airtime plus $.025 per minute over 1,200 minutes.
a. If Kim expects to use the phone for 21 hours per month, which plan should she select?
b. At what level of use would Kim be indifferent between the two plans? Hint: try to set the two plans equal.

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