Reference no: EM133066984

You are HR director for a growing architecture firm in Fort Wayne, Indiana, which currently has need of drafting 36 blueprints every hour. Each of your company's architects can create on average three blueprints per hour. You are considering hiring six drafters to shoulder the load; each drafter is slower than the architects and can create on average only two blueprints per hour. You scan the current wages in the Fort Wayne area (https://www.bls.gov/oes/current/oessrcma.htm) and notice that the architects in your company earn the local occupational median wage of $39.30 per hour, but that the prospective six drafters will likely want to get paid their local occupational median wage of $25.98 per hour.

a. Would your company save money in the creation of the 36 blueprints by hiring the six new drafters and firing some architects?

b. The Bureau of Labor Statistics projects that employment of drafters over the next decade will drop by 1.9%, compared to an increase of 3.1% for architects (https://www.bls.gov/emp/tables/emp-by-detailed-occupation.htm); your company assumes that this will reduce drafter wages down to $25.75 due to the drop in demand for them; the morale effect of the lower wage is predicted to reduce drafter productivity to 1.5 blueprints per hour. If the other values remain the same (architect wage and speed, need for 36 blueprints per hour), would the company save money in the creation of the 36 blueprints by hiring six drafters and firing some architects?