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1. In this problem, assume Poisson arrivals and exponential service times. Customers of Plaka Record rental outlet arrive at the store to rent CDs with an arrival rate of 1.25 customers per minute. The store has only 1 counter with a service rate of 2 customers per minute.

a. What is the probability that no customers are in the system? (In fraction form; example: 2/5) b. What is the average number of customers waiting for service? c. What is the probability that an arriving customer will have to wait for service? (In fraction form; example: 2/5) d. What is the probability that there are 5 customers in the system? (In fraction form; example: 2/5)

2. Suppose that Plaka Record rental outlet adds another counter to serve the customers simultaneously. Find the following: a. The average number of customers in the waiting line b. The average number of customers in the system c. The average time a customer spends in the waiting line d. The average time a customer spends in the system

3. Plaka Record rental outlet is willing to assign a cost of P500 per hour for customer waiting time and a cost of P350 for service time per hour. Perform an economic analysis on the two models. Which of the two models would you recommend? Explain.