Imagine you have some workers and some handheld computers that you can use to ta
ID: 1109491 • Letter: I
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 250 items per hour. And four or more workers sharing a computer can together inventory fewer than 260 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
(a)
If one worker uses 1 computer, he can inventory 150 items per hour.
Total cost = Cost of computer + Wages of worker
Total cost = $125 + $30
Total cost = $155
Total items inventoried = 150 items
Calculate the cost of inventorying a single item -
Cost = Total cost/Total items inventoried
Cost = $155/150
Cost = $1.03
The cost of inventorying a single item is $1.03
(b)
If two workers use 1 computer, they can inventory 200 items.
Total cost = Cost of computer + Wages of workers
Total cost = $125 + $60
Total cost = $185
Total items inventoried = 200 items
Calculate the cost of inventorying a single item -
Cost = Total cost/Total items inventoried
Cost = $185/200
Cost = $0.92
The cost of inventorying a single item is $0.92
(c)
If three workers use 1 computer, they can inventory 250 items.
Total cost = Cost of computer + Wages of workers
Total cost = $125 + $90
Total cost = $215
Total items inventoried = 250 items
Calculate the cost of inventorying a single item -
Cost = Total cost/Total items inventoried
Cost = $215/250
Cost = $0.86
The cost of inventorying a single item is $0.86
(d)
The cost of inventorying a single item get minimized when three workers are assigned to a computer.
So,
3 workers per computer should be assigned in order to minimize the cost of inventorying a single item.
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