Phoenix Computer manufactures and sells personal computers directly to customers. Orders

are accepted by phone and through the company's website. Phoenix will be introducing

several new laptop models over the next few months and management recognizes

a need to develop technical support personnel to specialize in the new laptop systems.

One option being considered is to hire new employees and put them through a threemonth

training program. Another option is to put current customer service specialists

through a two-month training program on the new laptop models. Phoenix estimates that

the need for laptop specialists will grow from 0 to 100 during the months of May through

September as follows: May—20; June—30; July—85; August—85; and September—

100. After September, Phoenix expects that maintaining a staff of 100 laptop specialists

will be sufficient.

The annual salary for a new employee is estimated to be $27,000 whether the person is

hired to enter the training program or to replace a current employee who is entering the

training program. The annual salary for the current Phoenix employees who are being

considered

for the training program is approximately $36,000. The cost of the three-month

training program is $1500 per person, and the cost of the two-month training program is

$1000 per person. Note that the length of the training program means that a lag will occur

between the time when a new person is hired and the time a new laptop specialist is available.

The number of current employees who will be available for training is limited.

Phoenix estimates that the following numbers can be made available in the coming months:

March—15; April—20; May—0; June—5; and July—10. The training center has thecapacity to

start new three-month and two-month training classes each month; however, the

total number of students (new and current employees) that begin training each month

cannot exceed 25.

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