Mr. Ks is a hair salon whose service process includes five activities conducted in the sequence described below. (The time required for each activity is shown in parentheses):

Activity 1: Welcome a guest and offer homemade herb tea. (10 minutes)

Activity 2: Wash and condition hair. (10 minutes)

Activity 3: Neck, shoulder, and back stress release massage. (10 minutes)

Activity 4: Design the hair style and do the hair. (25 minutes)

Activity 5: Check out the guest. (5 minutes)

Three servers (S1, S2, and S3) offer the services in a worker-paced line. The assignment of tasks to servers is the following:

S1 does Activity 1.

S2 does Activities 2 and Activity 3.

S3 does Activities 4 and Activity 5.

Q1) If the demand of Mr. Ks is 6 customers per hour, what is the average labor utilization (in %) of the servers?

Q2) Assume a wage rate of $18 per hour. What is the direct labor cost (in $/guest) when the demand is 6 customers per hour?

From now on assume that the demand is 6 customers per hour. To increase the service rate, Mr. Ks is considering two alternatives:

Alternative I: To hire a new employee to help any one (and only one) of the servers without changing the tasks performed by each server.

Alternative II: To redesign the assignment of tasks to servers. For this, Mr. Ks is evaluating to reassign Activity 5 from S3 to S1.

Q3) What would be the costs of direct labor under Alternative I (in $/guest)?

Q4) What would be the costs of direct labor of serving one guest under Alternative II (in $/guest)?