Problem 15-33 (Algorithmic)

Kolkmeyer Manufacturing Company is considering adding two machines to its manufacturing operation. This addition will bring the number of machines to ten. The president of Kolkmeyer asked for a study of the need to add a second employee to the repair operation. The arrival rate is 0.05 machines per hour for each machine, and the service rate for each individual assigned to the repair operation is 0.4 machines per hour.

1. Compute the operating characteristics if the company retains the single-employee repair operation. If required, round your answers to four decimal places.

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2. Compute the operating characteristics if a second employee is added to the machine repair operation. If required, round your answers to four decimal places.

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3. Each employee is paid $30 per hour. Machine downtime is valued at $85 per hour. From an economic point of view, should one or two employees handle the machine repair operation? Explain. If required, round your answers to two decimal places. Cost of one employee system: $ ____________ Cost of two employees system: $ _____________ From an economic point of view, one employee / two employees should handle the machine repair operation.