A toy manufacturer is experiencing quality problems on its assembly line. Every defective toy that leaves the factory costs the firm $20. The firm has decided to hire quality inspectors to catch defective toys before they leave the factory.

$\begin{array}{ll}
\text { Nimber of } & \text { Number of Defective } \
\text { Inspectors } & \text { Toys (per day) }\
0 & 40 \
1 & 24 \
2 & 16 \
3 & 10 \
4 & 6 \
5 & 2 \
6 & 0
\end{array}$
-If each inspector is paid $100 a day, how many inspectors should the firm hire to minimize the total cost of defective toys?

Question

A toy manufacturer is experiencing quality problems on its assembly line. Every defective toy that leaves the factory costs the firm $20. The firm has decided to hire quality inspectors to catch defective toys before they leave the factory.

$\begin{array}{ll}
\text { Nimber of } & \text { Number of Defective } \
\text { Inspectors } & \text { Toys (per day) }\
0 & 40 \
1 & 24 \
2 & 16 \
3 & 10 \
4 & 6 \
5 & 2 \
6 & 0
\end{array}$
-If each inspector is paid $100 a day, how many inspectors should the firm hire to minimize the total cost of defective toys?

Quizplus · Accepted Answer

The total cost of defective toys is minimized when the number of inspectors is 3. This is because the cost of hiring 3 inspectors is $300, and the cost of defective toys is $10 per day. The total cost is therefore $310, which is less than the total cost of hiring any other number of inspectors.

A Toy Manufacturer Is Experiencing Quality Problems on Its Assembly