Reference no: EM132373422

The Wine Institute has traditionally had one event size for hosting corporate wine-experience dinners: maximum 270 guests. However, we have received a lot of requests for events that are half that size and so we are considering adding a 135 guest event standard to our regular product offerings.

Please note that we currently have five Master sommeliers (M) on staff and their salaries are fixed regardless of how many events we run. So, assume that M=5, and just review the service of wine-experience dinners in terms of the optimal mix of hourly labor.

For serving 135 wine-experience dinners we estimate our production function to be Q = (M)(S1/2)(U1/2), where U are unskilled wait staff that we pay an hourly wage of $8, and S are Specialists of wine that we pay an hourly wage of $72, and M are the Master sommeliers (fixed at M=5) that we have on salary.

Please let me know how many unskilled wait staff (U) and how many certified Specialists of wine (S) to employ in our 135 event production scheme to minimize costs. Please make sure to report what the anticipated total cost of labor will be for staffing the event.