A manager in charge of new product development can hire engineers and market researchers. The annual salary of an engineer is $40,000, while a market researcher receives $20,000. The marginal contributions of engineers and market researchers are:

$\begin{array}{cccc}
\text { Engineers }(E)&&\text { Market Researchers }(R)\
&\text { Additional }&&\text { Additional }\
\text { Worker } & \text { NewProducts } & \text { Worker } & \text { NewProducts }\
1^{\text {st }} & 50 & 1^{\text {st }} & 20 \
2^{\text {nd }} & 40 & 2^{\text {nd }} & 15 \
3^{\text {rd }} & 30 & 3^{\text {rd }} & 10 \
4^{\text {th }} & 20 & 4^{\text {th }} & 5 \
5^{\text {th }} & 10 & 5^{\text {th }} & 2
\end{array}$
-How should the manager with an annual budget of $160,000, allocate this budget in order to maximize the number of new products developed?

Question

A manager in charge of new product development can hire engineers and market researchers. The annual salary of an engineer is $40,000, while a market researcher receives $20,000. The marginal contributions of engineers and market researchers are:

$\begin{array}{cccc}
\text { Engineers }(E)&&\text { Market Researchers }(R)\
&\text { Additional }&&\text { Additional }\
\text { Worker } & \text { NewProducts } & \text { Worker } & \text { NewProducts }\
1^{\text {st }} & 50 & 1^{\text {st }} & 20 \
2^{\text {nd }} & 40 & 2^{\text {nd }} & 15 \
3^{\text {rd }} & 30 & 3^{\text {rd }} & 10 \
4^{\text {th }} & 20 & 4^{\text {th }} & 5 \
5^{\text {th }} & 10 & 5^{\text {th }} & 2
\end{array}$
-How should the manager with an annual budget of $160,000, allocate this budget in order to maximize the number of new products developed?

Quizplus · Accepted Answer

Hiring 3 engineers and 2 market researchers costs $160,000 and results in the highest total of new products (40 + 30 + 20 + 15 + 10 = 115).

A Manager in Charge of New Product Development Can Hire