The HR manager at SleazeCo has determined (in conjunction with others at the fir

Question

The HR manager at SleazeCo has determined (in conjunction with others at the firm) that sales would increase by 100,000 units per year if they hired one more engineer in R&D to work on improving the product’s design and reliability. Alternatively, sales would likely increase without any improvements by 60,000 units per year if one more person was added to the sales force. Given market wages, an engineer costs about $60,000 per year and a sales person costs approximately $45,000 per year. What should SleazeCo do? Does the price of the product matter? What other information, if any, might you want to collect before you make a decision?

Explanation / Answer

Ans. This is an interesting question , Let's start Answering : :

In order to decide that whom should we hire between Engineer and Sales Person we have to find that how much does the Costs increase per Unit. When we'll hire any new personnel , Cost of Every Unit would increase by a certain proportion.

Sleaze Co would analyse that how much cost would per unit incur in both cases like in case of Engineer , his Salary would be $60000 and he would increase sale by 100000 units. 1 unit would incur $0.6 , in case of salesperson His salary would be $45000 and he would increase the sale by 60000. 1 unit would incur $0.75 . Thus Engineer is proving more efficient using this information.

Yes , Price of the Product would matter when we will consider which Person to hire. We'll compare between the Increased Price of Per Unit due to Hiring of Engineer and Sales Person .

We'll choose the Personnel who would not Cost us much and would give us Additional Output.

Any additional information would also be essential to make the decision.Additional information like : Cost of Production of 1 Unit , Profit margin for each unit , Total Demand of the Product in the Market , Additional Skills of the Personnel , Behavior and Conduct of the Personnel. etc. Would help us in taking the best Decision.

I hope you understood the answer. Do ask in case of doubts.

A Thumsup would be Highly Appreciated !!

Best of Luck !! Keep Chegging !!

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