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Harbor City Community Center Case Study

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1. With the information in regards to the allocations, Ms. Conaway has some decisions to make for the future of the company. Harbor City Community Center needs to evaluate the departments that is causing the most deficit. In this case the largest deficits are Counseling and Mental health. These two programs are also not where the bulk of clients are coming from. The departments only count for 3,500 visits (2,100 + 1,400) or 10.6% of the total visits. In combination they have a total cost of over $150 off from the average revenue of $42. The only reason the deficit is not as bad as it could be due to family planning costing less than $20 per visit and they have a total average charge of $42. They also have the largest number of visits at 10,000. Referrals and Placement is the second largest stream of revenue for the company with a charge of under $30 and the visitors being at 6,400 visits. …show more content…

Ms. Conaway then a slightly higher cost to help compensate for the large costs. By closing the cost gap on those departments it will help close the deficit without raising the prices too high. The other departments prices being maintained would allow for compensation in revenue to the losing departments. The extra income in those departments could help the more expensive departments to be more affordable since it is located in a low income area. Example: By raising the price to $56 on both departments that 's that 's in increase in $14 per visit. $14x3500 visitors=$49,000 this would then offset the current deficit to be at a net income of $2,800. If the center wanted to truly be at a complete balance of costs and revenue they would have to price the two departments at $55.20 (46,200/3,500=13.20; $42+$13.20=$55.20) By pricing it at this price then they would truly be seen as a

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