Chapter 4, Problem 20RP

Explanation of Solution

• Suppose that,
  • c_t = Net number of drivers hired at the beginning of the year t.
  • h_t = Number of drivers hired at the beginning of the year t.
  • f_t = Number of driver fired at the beginning of the year t.
  • d_t = Number of drivers have been hired or fired at the beginning of the year t.
  • z = Cost of the company
• Now, the cost of the company due to salary, hiring and firing at the beginning of the first year
  • d₁ = 50+h₁-f₁
• at the beginning of the second year, there were d₁ drivers.
• Therefore, number of drivers after hiring or firing at the beginning of second year
  • d₂ = d₁+h₂-f₂
• Similarly,
  • d₃ = d₂+h₃-f₃
  • d₄ = d₃+h₄-f₄
  • d₅ = d₄+h₅-f₅
• Also, the number of the ...