Cars arrive at the Zippy-Lube oil change center following a Poisson distribution at an average rate...
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Cars arrive at the Zippy-Lube oil change center following a Poisson distribution at an average rate of 4.5 cars per hour. The average service time per car is 10 minutes with a standard deviation of 3 minutes. A new automated oil dispensing device costs $5,000. The manufacturer's representative claims this device will reduce the average service time by 3 minutes per car. (Currently, employees manually open and pour individual cans of oil.) The hourly cost of server is $7 and the hourly cost of waiting is $12. The owner wants to analyze the impact the new automated device would have on his business and determine the pay back period for this device. Cars arrive at the Zippy-Lube oil change center following a Poisson distribution at an average rate of 4.5 cars per hour. The average service time per car is 10 minutes with a standard deviation of 3 minutes. A new automated oil dispensing device costs $5,000. The manufacturer's representative claims this device will reduce the average service time by 3 minutes per car. (Currently, employees manually open and pour individual cans of oil.) The hourly cost of server is $7 and the hourly cost of waiting is $12. The owner wants to analyze the impact the new automated device would have on his business and determine the pay back period for this device.
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ANS WER The owner would need to calculate the expected number of cars per hour with the new automated device and compare it to the current number of c... View the full answer
Related Book For
Spreadsheet Modeling & Decision Analysis A Practical Introduction to Management Science
ISBN: 978-0324656633
5th edition
Authors: Cliff T. Ragsdale
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