Refer to the previous question. Suppose that Road Rambler’s phone system can keep only four calls on hold at any time, the average profit margin of each call is $55, and that sales reps cost the company $12 per hour.
a. If callers who receive a busy signal take their business elsewhere, how much money is the company losing per hour (on average) if they employ a single sales rep?
b. What is the net effect on average hourly profits if the company employs two sales reps instead of one?
c. What is the net effect on average hourly profits if the company employs three sales reps instead of one?
d. How many sales reps should the company employ if it wants to maximize profit?