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CASE STUDIES CASE 1: Saveway Supermarkets Saveway Supermarkets is a major food retailer in upstate New loading dock, reducing the average time to unload a truck to York. The chain has over 60 stores that receive merchandise 18 minutes (workers earn S16 per hour in salary and benefits): from their Rochester, New York, warehouse. The warehouse (2) equip each loading dock with an electric forklift that can receives shipments of merchandise throughout the day from be leased for S5 per hour and reduce the time required to the various vendors and manufacturers with whom Saveway unload a truck to an average of 24 minutes, or (3) build up does business to two more loading docks (accounting for capital costs, each The Rochester warehouse has eight loading docks avail dock will cost Saveway S6 per hour to build). able for delivery of goods, Trucks arrive at the warehouse ap- While strategies and 2 are mutually exclusive, the firm proximately once every six minutes according to a Poisson may decide to implement strategy 3 either alone or in com- process. If all the loading docks are occupied, an arriving bination with 1 or 2. Saveway estimates the goodwill cost of truck waits in a queue until a dock becomes available a delivery truck being in the system at $60 per hour Currently, each dock is staffed by a single worker, who Prepare a business report recommending a course of ac unloads a truck in an average of 30 minutes. Saveway man tion to Saveway management assuming the objective is to agement has been getting complaints from some of its sup minimize total system costs. Assume that service times for pliers that their truckers are spending too much time un each option follow exponential distributions Include in your loading merchandise at the Rochester warehouse. Hence, report a comparison of the system parameters of your rec- Saveway has come up with a number of possible strategies ommendation to those of current operations to address this problem: (1) hire a second worker for each