The Cove is a midsized furniture store. Sales staff are scheduled in such a way that the same number are working at any given time, taking carefully coordinated rotating breaks The number of customers arriving per hour on Saturdays, the busiest day of the week, averages 30, Poisson distributed. A salesperson can deal with one customer in 5 minutes on average and costs the company $40 per hour in salaries and fringe benefits. Service times closely follow an exponential distribution. The manager is reviewing the number of salespersons to schedule for each shift. The cost of customers waiting before they receive service has been estimated at $2 per minute in terms of lost sales and loss of goodwill.

a. If management wants to minimize the cost of both sales staff and customer wait times, how many salespersons should be working at any time? 

b. What is the cost per hour to the company if they use the number of salespersons you computed in part a)?

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To determine the optimal number of salespersons that should be working at any time to minimize the cost of both sales staff and customer wait times we ... View the full answer