EXPERT RESPONSE
Broadcasting means that the packets are received by each active host on the network. So whichever network interface card (NIC) is listening will pick up and try to answer the packet. If they cannot answer, they will send it to their default gateway. Now it might happen that the default gateway and further gateways do not provide an answer before the time-to-live (TTL) of the packet expires. So you will get a timed-out request. TTL is fixed so that packets do not remain on the network endlessly. Other reasons you might be getting time-out requests is because either a link is down in between the source and destination, or the host is too busy to answer.
You can configure the network to avoid sending time-outs but that's not a good idea as it is a measure to check the performance of the network. The ideal way is to use expected ping to find out where the problem is and set it straight.
As for the second part of your question on how to control broadcast, hubs create a single collision as well as a broadcast domain. So a packet received on one interface is sent to all other interfaces whereas in a switch it depends upon the VLANs you create. A packet will go out of the certain port of the VLAN and not to all of the ports. Layer 2 switches will do simple switching whereas Layer 3 switches can do routing also. I would suggest you go for the Layer 3 switch. The price might be a little higher but you will have added functionality which will help you when you expand your network.
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