Customers are exponentially distributed

Assignment Help Operation Management

Reference no: EM131793199

You manage a hotel with one reception desk. On a typical day, you receive on average 8 customers per hour. It takes on average 6 minutes to check-in the customer. For the sake of this problem, we assume that checking-in ONLY happens daily between 2:00-5:00pm.

Assume that the inter-arrival times between customers are exponentially distributed, and that the time to check-in is also exponentially distributed.

a) What are the demand rate and service rate at the reception? What is the utilization of the reception desk during checking times?

b) What is the average time that a customer has to wait before actually being served? You often drop by at 3:00pm to monitor the reception, how many customers do you expect to see at the reception (checking-in or waiting to check in) at this time?

c) Suppose the cost of waiting in the queue is estimated to be $2/min/customer. The hotel is considering buying an automated checking-in system that will cost $100,000/year. The automated system is expecting to reduce checking-in time from 6 minutes to 4 minutes. Is it worth it? Assume 1 year = 300days

PS: the current person working at the desk will still be there helping the customers using the automated system.

Reference no: EM131793199

Questions Cloud

Preparing an order and receiving shipment of flour involves : Preparing an order and receiving a shipment of flour involves a cost of $11/order. Annual carrying costs are $85/bag.

Hypothetical report on capacity planning-inventory planning : Write a hypothetical report on Capacity planning and Inventory planning/management of a restaurant. How would a restaurant go about these planning?

Assume the two operations process goals : Assume the two operations process goals. To provide timely acknowledgement of customer orders. To provide assurance of customer information and payment.

Current state of mobile technology : you wrote about (TARGET) You are preparing for a meeting with the firm's Chief Information Officer (CIO) about the current state of mobile technology

Customers are exponentially distributed : Assume that the inter-arrival times between customers are exponentially distributed, and that the time to check-in is also exponentially distributed.

Develop plan to minimize total cost-identify your total cost : Beginning inventory is zero and backorders are not allowed. Develop a plan to minimize total cost and identify your total cost.

What is their inventory turnover : What is their inventory turnover, percent of assets committed to inventory, and James’ performance compared to industry leaders?

Calculate the initial process capability : Calculate the initial process capability and then recalculate when the process average shifts to 91.

Discuss market segmentation : Discuss market segmentation. What does it mean and how could this help businesses?

User Account

All Pages