Regional Airlines is establishing a new telephone system for handling flight reservations. During the 10:00 A.M. to 11:00 A.M. time period, calls to the reservation agent occur randomly at an average of one call every 3.75 minutes. Historical service time data show that a reservation agent spends an average of 3 minutes with each customer. The waiting line model assumptions of Poisson arrivals and exponential service times appear reasonable for the telephone reservation system.
Regional Airlines’ management believes that offering an efficient telephone reservation system is an important part of establishing an image as a service-oriented airline. If the system is properly implemented, Regional Airlines will establish good customer relations, which in the long run will increase business. However, if the telephone reservation system is frequently overloaded and customers have difficulty contacting an agent, a negative customer reaction may lead to an eventual loss of business. The cost of a ticket reservation agent is $20 per hour. Thus, management wants to provide good service, but it does not want to incur the cost of overstaffing the telephone reservation operation by using more agents than necessary.

Managerial Report
Prepare a managerial report for Regional Airlines analyzing the telephone reservation system. Evaluate both the system that does not allow waiting and the expanded system that allows waiting. Include the following information in your report:
1. A detailed analysis of the operating characteristics of the reservation system with one agent as proposed by the vice president of administration. What is your recommendation concerning a single-agent system?
2. A detailed analysis of the operating characteristics of the reservation system based on your recommendation regarding the number of agents Regional should use.
3. The telephone arrival data presented are for the 10:00 A.M. to 11:00 A.M. time period; however, the arrival rate of incoming calls is expected to change from hour to hour. Describe how your waiting line analysis could be used to develop a ticket agent staffing plan that would enable the company to provide different levels of staffing for the ticket reservation system at different times during the day. Indicate the information that you would need to develop this staffing plan.