A radio manufacturer is experiencing theft problems at its warehouse and has decided to hire security guards to reduce the thefts.The firm wants to minimize the net cost of warehouse thefts. $\begin{array}{c}
\begin{array}{c}
\text {Number of}\
\text { Security Guards}\
0\
1\
2\
3\
4\
5\
\end{array}
\begin{array}{c}
\text {Number of Radios}\
\text { Stolen Per Week }\
50\
30\
20\
14\
8\
6\
\end{array}
\end{array}$
Given the above info,if each security guard is paid $200 a week and the cost of a stolen radio is $25,how many security guards should the firm hire?
A)1
B)2
C)3
D)4
E)5

Question

A radio manufacturer is experiencing theft problems at its warehouse and has decided to hire security guards to reduce the thefts.The firm wants to minimize the net cost of warehouse thefts. $\begin{array}{c}
\begin{array}{c}
\text {Number of}\
\text {  Security Guards}\
0\
1\
2\
3\
4\
5\
\end{array}
\begin{array}{c}
\text {Number of Radios}\
\text { Stolen Per Week }\
50\
30\
20\
14\
8\
6\
\end{array}
\end{array}$
 Given the above info,if each security guard is paid $200 a week and the cost of a stolen radio is $25,how many security guards should the firm hire?
A)1
B)2
C)3
D)4
E)5

Quizplus · Accepted Answer

To minimize the net cost of warehouse thefts, calculate the total cost (theft cost + security cost) for each option. The theft cost decreases with more guards, but the security cost increases. The option with the lowest total cost is optimal. For 2 guards, the theft cost is $500 (20 radios * $25) and the security cost is $400 (2 guards * $200), totaling $900, which is the lowest total cost among the options.

A Radio Manufacturer Is Experiencing Theft Problems at Its Warehouse