Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 41

There are a number of techniques to help people stop smoking, but their cost and effectiveness vary widely. One accepted measure of effectiveness of a program is the percentage of enrollees quitting. The table below shows several techniques touted as effective stop-smoking methods, some historical data on the approximate cost of each program per person, and the percentage of people smoke- free 3 months after the program ended.
The Cancer Society provides annual cost-offset funding to cancer patients so more people can afford these programs. A large clinic in St. Louis has the capacity to treat each year the number of people shown. If the clinic plans to place a proposal with the Cancer Society to treat a specified number of people annually, estimate the amount of money the clinic should ask for in its proposal to do the following:
a) Conduct programs at the capacity level for the technique with the lowest cost- effectiveness ratio.
b) Offer programs using as many techniques as possible to treat up to 1300 people per year using the most cost-effective techniques.