Larry Ellison starts a company that manufactures high-end custom leather bags. He hires two employees. Each employee

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Larry Ellison starts a company that manufactures high-end custom leather bags. He hires two employees. Each employee only begins working on a bag when a customer order has been received and then she makes the bag from beginning to end. The average production time of a bag is 1.8 days, with a standard deviation of 2.7 days. Larry expects to receive one customer order per day on average. The interarrival times of orders have a coefficient of variation of one. What is the expected duration, in days, between when an order is received and when production begins on the bag?

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Operations Management

ISBN: 9781260547610

2nd International Edition

Authors: Gerard Cachon, Christian Terwiesch

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