Pricing Police Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Pricing Police Case Study Analysis

Table: 3

Service Cost for Each Municipality- Population Cost Drivers
	OPP TOTAL BASE SERVICE	ALDER	BALSAM	CEDAR
TOTAL BASE SERVICE AND CFS COST	359,316,774
TOTAL MUNICIPAL POPULATION	2,146,789
COST PER POPULATION	167.37
TOTAL SERVICE COST		2,380,059	4,556,089	396,677

Household Income

The service cost for each municipality has been calculated by assuming only one cost driver- Household income.BY using only one cost driver of Household income, the total cost for Alder is $113,829,754, for Balsam is $187,956,667, and for Cedar is $142,846,976, which is calculated by multiplying average household incomewith average household’s people. This value is then divided by the total service and CFS value for calculating each municipal service cost.

Table: 4

Service Cost for Each Municipality- Household Income Cost Drivers
	OPP TOTAL BASE SERVICE	ALDER	BALSAM	CEDAR
TOTAL BASE SERVICE AND CFS COST	359,316,774
TOTAL MUNICIPAL HOUSEHOLD INCOME	157,102
COST PER HOUSEHOLD INCOME	2,287.16
TOTAL SERVICE COST		113,829,754	187,956,667	142,846,976

Property Value

The service cost for each municipality has been calculated by assuming only one cost driver- Property value. The total service cost for Alder is $276,93,734, for Balsam is $347,828,864, and for Cedar is $547,145,125. The service cost could be calculated by dividing the total base service and CFS cost by the total service area’sproperty assessment value, then allocated this cost to each municipal by multiplying each municipal’s property value.

Table: 5

Service Cost for Each Municipality- PROPERTY VALUE Cost Drivers
	OPP TOTAL BASE SERVICE	ALDER	BALSAM	CEDAR
TOTAL BASE SERVICE AND CFS COST	359,316,774
TOTAL MUNICIPAL PROPERTY VALUE	244,530
COST PER PROPERTY VALUE	1,469.42
TOTAL SERVICE COST		276,939,734	347,828,864	547,145,125

Recommendations

After evaluating all the alternative solutions based of some cost factors along with making a detailed comparison analysis of the resulting service cost from each alternative solution, it is recommended that for Aldar, Balsam and Cedar, the CFS cost driver could be considered as more appropriate as compared to other cost drivers,because it is yielding low cost as compared to other cost drivers, which represented a 44%, 63% and 56% decrease in the total actual cost, respectively. In addition to this, this cost driver is more important than other factors, because it is directly linked with the total criminal cases and calls.(N Strossen - NYUL Rev, 1988). (See appendix 2)

Conclusion

It is concluded that Doran was considering to analyze the potential benefits, which could be arises due to a new billing model in order to satisfy the municipal’s mayors. The new model included two cost drivers- CFS and base services. The detailed analysis has been performed in order to calculate the actual cost each municipal will pay, by using the two cost drivers with the inclusion of applying different cost factors in order to evaluate the effectiveness of the proposed ne billingmodel. But, it has been evaluated that the new billing models includes some op holes because it was charging high cost with each municipal based on two factors. Thus, it is recommended that only CFS cost driver would provide accurate andtransparent calculations for future billing.............................

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