There are three candidates under consideration here. Exhibit 1 gives details. In each case, a batch of up to 20 customers can go on a ride together. Revenue details in terms of admission per head and ride duration are provided. Also shown is the daily lease rate. Mary tells John that the arrival rate to the rides is 10 batches per hour, but customers will only come in at that rate if the average queue length is no more than 2 batches. If a certain ride is installed, and the average queue length turns out to be greater than 2 batches, then the arrival rate will diminish accordingly so that the average queue length drops to this value. (John realizes how he can use the Lq formula for Model 2 to figure out the resulting lambda knowing Lq and mu; by trial and error). They agree to base their lease decision on profit/day results. John plans to compute the daily profit associated with each alternative and recommend the most profitable alternative. 

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Attraction lease rate ($/day) ride duration admission ($/head) batch size daily hours of operation Gravity Defier $1000 4.5 mins. 20 10 Olde Time Carousal $250 5.25 mins. 20 10 Exhibit 1 Mighty Mini Ferris $500 5.25 mins. 2.50 20 10 Attraction lease rate ($/day) ride duration admission ($/head) batch size daily hours of operation Gravity Defier $1000 4.5 mins. 20 10 Olde Time Carousal $250 5.25 mins. 20 10 Exhibit 1 Mighty Mini Ferris $500 5.25 mins. 2.50 20 10

Answer rating: 100% (QA)

To compute the daily profit John needs to consider the following factors Total revenue This is calcu... View the full answer