Wallace Publishers has a large number of employees who use the companys single fax machine. Employees arrive

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Wallace Publishers has a large number of employees who use the company’s single fax machine. Employees arrive randomly to use the fax machine at an average rate of 20 per hour. This arrival process is approximated by a Poisson distribution. Employees spend an average of two minutes using the fax machine, either transmitting or receiving items. The time spent using the machine is distributed according to a negative exponential distribution. Employees line up in single file to use the machine, and they obtain access to it on a first-come, first-served basis. There is no defined limit to the number who can line up to use the machine. Management has determined that by assigning an operator to the fax machine rather than allowing the employees to operate the machine themselves, it can reduce the average service time from the current 2 minutes to 1.5 minutes. However, the fax operator’s salary is $10.25 per hour, which must be paid eight hours per day even if there are no employees wishing to use the fax machine part of the time. Management has estimated the cost of employee time spent waiting in line and at the fax machine during service to be 17¢ per minute (based on an average salary of $13.10 per hour per employee). Should the firm assign an operator to the fax machine?

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Operations Management Creating Value Along the Supply Chain

ISBN: 978-1118301173

1st Canadian Edition

Authors: Roberta S. Russell, Bernard W. Taylor, Ignacio Castillo, Navneet Vidyarthi

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