Master Karr is a supplier of industrial parts. All orders are received at a call center. The call center has 15 phone lines, so that a maximum of 15 callers may be in the system at a time. Calls arrive at an average of 4 calls per minute. The call center currently has 5 customer service representatives (CSRs). Each CSR averages 1 minute a customer. Master Karr estimates that waiting costs incurred are $ 1 per customer per minute in terms of phone charges and loss of future business. Also assume that callers who get a busy signal take their business elsewhere, resulting in a loss to Master Karr of $ 50 per lost call. Assume that callers do not abandon once they enter the system. CSRs are paid $ 15 per hour.
a. What is the hourly cost to Master Karr of the cur-rent configuration of the call center?
b. What is the hourly cost to Master Karr if they decide to hire another CSR? Do you recommend this move?