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 160 items per hour. And four or more workers sharing a computer can together inventory fewer than 160 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?