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 125 items per hour. Two workers sharing a computer can together inventory 175 items per hour. Three workers sharing a computer can together inventory 185 items per hour. And four or more workers sharing a computer can together inventory fewer than 185 items per hour. Computers cost $100 each and you must pay each worker $25 per hour.

a. The cost of inventorying a single item is $1.00 per item.

b. The cost of inventorying a single item is $0.86 per item.

c. The cost of inventorying a single item is $0.95 per item.

d. The cost of inventorying a single item is $1.08 per item.

e. You should assign two workers per computer in order to minimize the cost of inventory per single item.

Explanation:

Note: This question is not complete. A complete question is therefore provided before answering the question as follows:

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 125 items per hour. Two workers sharing a computer can together inventory 175 items per hour. Three workers sharing a computer can together inventory 185 items per hour. And four or more workers sharing a computer can together inventory fewer than 185 items per hour. Computers cost $100 each and you must pay each worker $25 per hour.

a. If you assign one worker per computer, what is the cost of inventorying a single item? Instructions: Round your answer to two decimal places. $ per item

b. If you assign two workers per computer, what is the cost of inventorying a single item? Instructions: Round your answer to two decimal places. $ per item

c. If you assign three workers per computer, what is the cost of inventorying a single item? Instructions: Round your answer to two decimal places. $ per item

d. If you assign four workers per computer, what is the cost of inventorying a single item? Instructions: Round your answer to two decimal places. $ per item.

e. How many workers per computer should you assign if you wish to minimize the cost of inventory per single item? worker(s) per computer

The explanation to the answer is now provided as follows:

Note: See the attached excel file for all the calculations.

a. If you assign one worker per computer, what is the cost of inventorying a single item? Instructions: Round your answer to two decimal places. $ per item

The cost of inventorying a single item is $1.00 per item.

b. If you assign two workers per computer, what is the cost of inventorying a single item? Instructions: Round your answer to two decimal places. $ per item

The cost of inventorying a single item is $0.86 per item.

c. If you assign three workers per computer, what is the cost of inventorying a single item? Instructions: Round your answer to two decimal places. $ per item

The cost of inventorying a single item is $0.95 per item.

d. If you assign four workers per computer, what is the cost of inventorying a single item? Instructions: Round your answer to two decimal places. $ per item.

The cost of inventorying a single item is $1.08 per item.

e. How many workers per computer should you assign if you wish to minimize the cost of inventory per single item? worker(s) per computer

To minimize the cost of inventory per single item, you should assign the number of workers at a point where the cost inventorying a single item is the lowest.

From from parts a to d above, the lowest cost of $0.86 per item of inventorying a single item is obtained in part b when you assign two workers per computer.

Therefore, you should assign two workers per computer in order to minimize the cost of inventory per single item.

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