Operations Management: Processes and Supply Chains (11th Edition)
Operations Management: Processes and Supply Chains (11th Edition)
11th Edition
ISBN: 9780133872132
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Chapter 10, Problem 1AME

If we use the same number of workers in each period, what happens as the number of workers increases from 15?

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A small-size cargo company in Dubai has been operating since the year 2000. The total workforce comprises ten employees, out of which five are in sales, three are in operations, one is handling legal and accounts matters, and one manager is also the owner of the company. Total annual turnover is enough to run the company smoothly. Recently another director has joined who brought large investment to the company. The Board of directors has decided to expand the business in other cities and establish offices overseas in potential locations. This expansion policy will directly be linked to the new manpower needs. Therefore, the board has decided to open an HR department with one HR manager and three staff to look after HR operations. The new HR manager has noticed that the company has a very convenient way of recording the data, where all transactions are recorded on excel documents. “this may not work in the new setup with many branches around the world”, he mentioned in the BOD meeting.…
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Number of Pickers (per Hour) 0 1 2 3 4 5 6 7 8 9 Total Strawberry Output (Boxes per Hour) 0 5 10 14 17 19 20 20 18 15 Price of Total Strawberries Revenue (per Box) (per Hour) $2 2 2 2 2 2 2 2 2 2 $0 10 20 28 34 38 40 40 36 30 Marginal Revenue New Price of Product Strawberries $10 10 8 6 + NO + -4 -6 $4 4 4 4 4 4 4 4 4 4 New Total Revenue (per Hour) How many pickers would be hired at $12 an hour after the price change? picker(s) New Marginal Revenue Product

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