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 the cost of a stolen radio is $25,what is the MOST the firm would be willing to pay to hire the first security guard?
A)$200
B)$250
C)$500
D)$750

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 the cost of a stolen radio is $25,what is the MOST the firm would be willing to pay to hire the first security guard?
A)$200
B)$250
C)$500
D)$750

Quizplus · Accepted Answer

The firm would be willing to pay up to the amount saved by hiring the first security guard. Without any guards, 50 radios are stolen, and with one guard, 30 radios are stolen. The reduction in theft is 20 radios. At $25 per radio, the savings is 20 * $25 = $500.

A Radio Manufacturer Is Experiencing Theft Problems at Its Warehouse