Cost Benefit Analysis
Cost Benefit Analysis
When dealing with customers and the cost of what it takes to upgrade a system, it is rather difficult to hit it on the nose. For instance, XY&Z is planning on upgrading their fiber optic network in the Los Angeles area in order to combat market share loss to the cable company. XY&Z has pledged to spend $1 billion dollars in order to do so. (AT&T, 2007) The current cost of pulling fiber and upgrading here in South Carolina is approximately $5/ft. Since we are unable to truly judge what the costs may be in California, we'll use this number. XY&Z is using a fiber/copper hybrid cable which is slightly cheaper and gives almost the same results as fiber optic cable. We could use a slightly lower cost approximation but labor is more expensive on the west coast.
Looking at XY&Z's proposal of upgrading 40,000 miles of its network over the next 12 months, we see that if the budget was just used entirely for pulling, installing and burying the fiber/copper hybrid,......
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