lab4 - Lab Exercise IV ISE 3424 How many workers should you...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Lab Exercise IV ISE 3424 – How many workers should you employ? Pasupathy, Spring 2010 You are the manager of a small company that undertakes painting projects. Your com- pany was awarded a painting project with the following terms. 1. The project will have two phases — scraping and painting. 2. The project should be completed in 30 days, and the initial oFer is 20 , 000 dollars. 2. Late completion penalty is charged at 500 dollars per day. So, for example, if the job is late by 3 . 42 days, the penalty incurred is 500 × 3 . 42 = $1710 dollars. 3. Early completion fetches an incentive at 300 dollars per day. You have to hire day labourers for the project, with a prevailing rate of $300 per day. You are now faced with a conundrum. Employing a large number of day labourers, while providing early completion incentives, means increased wages. In contrast, employing too few day labourers might lead to hefty penalties. How many day labourers should you employ if you wish to maximize your expected pro±t? Assume that the completion time for the scraping part of the project is distributed accord-
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.
Ask a homework question - tutors are online