Taboo Tattoo and Tanning has two tanning teds. One bed serves the company’s regular members exclusively. The second bed serves strictly walk-in customers (those without appointments) on a first-come, first-served basis. Gary Clendenen, the store manages, has noticed on several occasions during the busy 5 hours of the day (2:00 P.M. until 7:00 P.M.) that potential walk-in customers will most often walk away from the store if they see one person already waking for the second bed. He wonders if capturing this lost demand would justify adding a third bed, Leasing and maintaining a tanning bed costs Taboo $600 per month. The price paid per customer varies according to the time in the bed, but Gary has calculated the average net income for every 10 minutes of tanning time- to be $2. A study of the pattern of arrivals during the busy hours and the time spent tanning has revealed the following:

(a) Simulate 4 hours of operation (arrivals over 4 hours). Use the 14th column of Table F.4 (p. 821) for arrival times and the 8th column for tanning times.. Assume there is one person who has just entered the bed at 2:00 P.M. for a 20-minute tan. Indicate which customers balk at waiting for the bed to become available. How many customers were lost over the 4 hours?
(b) If the store is open an average of 24 days a month, wilt capturing all lost sales justify adding a new tanningbed?

  • CreatedJuly 23, 2013
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