Imagine you have some workers and some handheld computers th

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

Solution

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