You are investigating the use of automated robots to replace some of the tasks performed by waiters and waitresses in your neighborhood restaurant. The robots are capable of clearing tables and delivering food to customers. Customer interactions to order food would continue to be done by humans. You estimate that you could reduce your staff from 15 workers making $15/hour to around 7 workers. In addition, you are sure that use of the robots would attract additional customers perhaps increasing sales by $100,000/year. The robots cost $75,000 each and you figure you will need two or three depending on how fast business increases. Perform an analysis to determine if hiring robots and letting humans go makes good economic sense.

Question

You are investigating the use of automated robots to replace some of the tasks performed by waiters and waitresses in your neighborhood restaurant. The robots are capable of clearing tables and delivering food to customers. Customer interactions to order food would continue to be done by humans. You estimate that you could reduce your staff from 15 workers making $15/hour to around 7 workers. In addition, you are sure that use of the robots would attract additional customers perhaps increasing sales by $100,000/year. The robots cost $75,000 each and you figure you will need two or three depending on how fast business increases. Perform an analysis to determine if hiring robots and letting humans go makes good economic sense.

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