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with pies, hamburgers and chips, which would provide the bulk of the meal demands. Staff
requiring this service would pay the raw material cost of all the ingredients. Secondly,
Extra Catering would provide a full service operation for those that did not want self
service fast food, with a range of menus, and if booked in advance a waitress service for
guests. Extra Catering would provide all the raw materials and equipment, and price meals
on a cost plus 10 per cent basis. For the average meal this would mean around € 1.30.
The quote for this service was € 20,000 per annum.
Speed Feed. SF was a national company that specialised in providing 24 hour catering
cover for manufacturing and service companies. It offered the same type of service as
Extra Catering with a whole range of prepared meals, either frozen or fresh, which could
be heated at the time of consumption. The company made its money from the sale of
products, rather than providing a full service function. It offered to install all the equipment
free, provided the company could sign a three year contract. Cleaning costs would be
carried by Speed Feed within the overall cleaning costs of the company. The average cost
of meals would be € 1.70 per head.
Data processing
Currently, the company employed four staff in the area of data processing (at an annual
cost of € 55,000) and had installed a large computer, which was on an annual lease of €
35,000. The system had suffered from a considerable lack of expertise and delays in
implementation, especially now that the data processing manager had resigned. It was
possible that outside bureaux could provide a far better and more cost effective service.
The two companies approached had all substantial experience in the provision of data
processing support for manufacturing companies: BDS and OnLine Processing.
BDS. BDS were one of the major regional data processing bureaus. They had invested in
a large mainframe computer in late 1987 and so could provide one of the most rapid and
comprehensive data processing services available locally. The company operated either a
batch or an online service, with batch provision being considerably cheaper than online.
With the batch service, the client had to provide all the data on specifically designed forms
and deliver them to the company by messenger.
The likely total cost to Burke Engineering was difficult to define, but on the current data
load the cost would be around € 25,000, though there was the proviso that this cost could
rise if the complexity of the data or its volume increased. The online data processing
service involved a basic cost of 10 per hour with additional processing time when and if
required. It was likely that this would cost in the region of € 50,000 for the current data
requirements of the company, though you have found that online access to data
processing companies tends to substantially increase the amount of data processing that
is carried out.
OnLine Processing. The major alternative was OnLine Processing. This company
specialised in instant access. It offered tailor made management systems, creating
software for particular applications within the client company. The cost of the creation of
these programmes depended on their complexity. OnLine estimated that with the current
operation 20 programmes would be required, each costing between € 500 and € 2,500.
Once established the cost to Burke Engineering would vary according to the amount of
access that the company required. With the current level of demand, OnLine estimated
that access costs would be € 35,000 but should greater demands be made costs would
inevitably rise.
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