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Sterling Products Corporation (SPC), a local furniture manufacturer is considering automating its frame assembly operation by leasing a completely automated work station.Currently there is only a single employee, Willard Eggleston, doing the framing, and he is performing the assembly task by hand.Willard costs SPC a total of $8 per hour to maintain on their payroll.Frames ready for assembly arrive randomly at a rate of roughly one every 30 minutes on the average.It takes Willard an average of 25 minutes to assemble each of the frames, and his assembly times are fairly random. The automatic work station would replace Willard (who wants to go back to school anyway) and would cost SPC $10 per hour to lease.It would assemble frames at a constant rate of 3 per hour.Alternatively, SPC may simply hire an additional employee to work alongside Willard assembling the frames. Since this is a low skill operation, the new employee is expected to be essentially as productive as Willard, but will cost SPC only $7 per hour since Willard has earned some longevity raises along the way. Another possibility being considered by SPC is to lease a staple gun, which should improve Willard's productivity by around 50% but will cost SPC about $1 per hour. SPC has estimated that its inventory holding costs are quite high, at $2 per hour per frame unit held up in process.It is, therefore, important for SPC to choose an alternative which will minimize SPC's total costs, including the cost of work-in-process inventory.

1) Which of the alternatives provides the lowest estimated total cost per hour for processing the frames?Note that "total cost" here includes wages, equipment rentals, and work-in-process inventory costs.

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