What is the cost of inventorying single item

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Reference no: EM131112426

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 100 items per hour. Two workers sharing a computer can together inventory 150 items per hour. Three workers sharing a computer can together inventory 200 items per hour. And four or more workers sharing a computer can together inventory fewer than 210 items per hour. Computers cost $125 each and you must pay each worker $30 per hour.

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?

Reference no: EM131112426

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