Question

Imagine you have some workers and some handheld computers that you can use to take inventory at a warehouse. There are diminishing returns to taking inventory. If one worker uses one computer, he can inventory 150 items per hour. Two workers sharing a computer can together inventory 200 items per hour. Three workers sharing a computer can together inventory 220 items per hour. And four or more workers sharing a computer can together inventory fewer than 235 items per hour. Computers cost $125 each and you must pay each worker $30 per hour.

Answer 1

Answer:

a. If you assign one worker per computer, the cost is $1.04

b. If you assign two workers per computer, the cost is $0.93

c. If you assign three workers per computer, the cost is $0.98

d. If you want to minimize cost, you should assign 2 workers per computer.

Explanation:

a. One person can inventory 150 items. The cost of each worker is $30 and the cost of a computer is $125 each. So 125 + 30 = 155. Take 155 and divide it by 150. You get 1.04.

b. Same steps as above, except that there is an additional worker, and two workers can inventory 200 items per hour, so the cost of both workers will be $60. 125 + 60 = 185. 185 / 200 = 0.93.

c. Three workers can inventory 220 items per hour. Three workers will cost $90. 125 + 90 = 215, 215/220 = 0.98.

d. Given the information in the problem, you should assign 2 workers per computer to minimize cost, as this is the lowest cost out of the three solutions.

(Answers are rounded to two decimal places)