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 225 items per hour. And four or more workers sharing a computer can together inventory fewer than 235 items per hour. Computers cost $125 each and you must pay each worker $30 per hour.
Required:
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?
c) How many workers per computer should you assign if you wish to minimize the cost of inventorying a single item?