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Candan has a fastfood restaurant, and she hires one female worker to help her. It is well-known that a worker working at Candans fastfood restaurant
Candan has a fastfood restaurant, and she hires one female worker to help her. It is well-known that a worker working at Candans fastfood restaurant never works more than five weeks (due to Restaurants problems). A worker of this restaurant quits the job 20% of the time during her first week of work. If the worker completes her first week, then she quits during her second week 35% of the time. If the worker completes her second week at the restaurant, then she will quit during his third week 40% of the time. If the worker completes her third week at the restaurant, then she will quit during his fourth week 60% of the time. If the worker completes her fourth week, then she is sure to quit the job by the end of the fifth week. At the beginning of each week, Candan must decide whether or not to fire the existing worker and hire a new one. It always costs $400 to fire the existing worker and hire a new one (immediately), but if a worker quits her job during a week, this incurs a cost of $1,200 (due to decreased service quality and lost costumers) and Candan must hire a new worker with the cost of $400 (the new worker will start to work at the beginning of the next week). Just three of the four hiring policies are under consideration:
Policy 1 Plan to fire the current worker at the beginning of her fifth week of work (when she has completed her fourth week), and hire a new worker.
Policy 2 Plan to fire the current worker at the beginning of her fourth week of work (when she has completed her third week), and hire a new worker.
Policy 3 Plan to fire the current worker at the beginning of her third week of work (when she has completed her second week), and hire a new worker.
Which policy will give the lowest average weekly cost?
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