Imagine you have some workers and some handheld computers that you can use to ta

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 125 items per hour. Two workers sharing a computer can together inventory 175 items per hour. Three workers sharing a computer can together inventory 225 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. Instructions: Round your answers to 2 decimal places. a. If you assign one worker per computer, what is the cost of inventorying a single item? b. What if you assign two workers per computer? What is the cost of inventorying a single item? c. What if you assign three workers per computer? d. How many workers per computer should you assign if you wish to minimize the cost of inventorying a single item? Instructions: Enter your answer as a whole number. worker(s) per computer

Explanation / Answer

PART-1) If you assign one worker per computer, what is the cost of inventorying a single item?

Solution: 1.50

Working:

Computer cost: $100

Cost of employing one worker: $25

Number of units inventoried: 100

Cost to assign one workers per computer = ($100 + $25) / 100 = 1.50

PART-2) If you assign two workers per computer, what is the cost of inventorying a single item?

Solution: 0.86

Working:

Computer cost: $125

Cost of employing two workers: $50

Number of units inventoried by the two workers: 175

Cost to assign two workers per computer = ($100 + $50) / 175 = 0.86

PART-3) What if you assign three workers per computer?

Solution: 0.77

Working:

Computer cost:: $125

Cost of employing three workers: $75

Number of units inventoried by the two workers: 225

Cost to assign three workers per computer = ($100 + $75) / 225 = 0.77

PART-4) How many workers per computer should you assign if you wish to minimze the cost of inventory of a single item?

Solution: 2

Working: For the minimization of the cost of inventorying a single item, 2 worker per computer should be assigned. It will be the lowest inventoried cost per unit

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