Amazon Warehousing Asia is planning to expand their operation in delivering packages to consumer this coming Christmas season. It anticipates that their ordering online service will increase by twofold this year. The operation currently is being done manually with hiring 70 workers to mend their operation in Asia. Amazon Warehousing Asia is currently entertaining an idea to an additional employee to help cater for the increasing demand in its services. Currently, total output is 300 units of packages a day. There are three applicants for the job and the output of each applicant is shown in Table Q1.

Table Q1: Productivity of applicant Applicant Output

A 75

B 60

C 55

Amazon Warehousing Asia has implemented process innovation through labour-saving technical change. The company purchased Kiva Systems, intending to use 5 robots in its warehouses operation. Each robot can produce output 100 packages per day resulting in workers layoff from 70 workers to 40 workers. Assume each robot daily maintenance cost is RM50.

The daily wage (per worker) is RM100, and the price of the firm's output is RM60. The cost of other variable input is RM500 per day.

(i) Determine the number of new workers Amazon Warehousing Asia should hire. (5 marks)

(ii) Propose on the optimum number of workers and number of robots that Amazon Warehousing Asia should use in the warehouse operation. (6 marks)

(iii) Evaluate whether Amazon Warehousing Asia should continue operation at the current labour-capital combination or change its operation to full automation using marginal product theory analysis.