If operators cost $15 per hour in wages and fringe benefits and machine downtime costs $75 per hour in lost production, what is the optimal number of operators for this bank of machines?
A)1
B)2
C)3
D)4
E)5

Question

Quizplus · Accepted Answer

The optimal number of operators is the one that minimizes the total cost of wages and downtime. With each additional operator, downtime decreases, but wage costs increase. The balance is achieved when the cost of adding another operator equals the savings from reduced downtime.

If Operators Cost $15 Per Hour in Wages and Fringe