Determine if it is worth reallocating resources

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Reference no: EM132207069

Accounts Receivable (AR) at Tiger Finance receives an average of 1,000 checks per week. On average there are 500 checks waiting to be deposited. Assume that the checks coming in are either small or large. Small checks are for an average of $1000 and large checks are for an average of $5,000. 15% of the checks coming in are large with the rest being small. Currently no distinction is made between the large and small checks. As a result, 15% of the checks waiting to be processed are large. Determine if it is worth reallocating resources so that large checks wait an average of 0.3 weeks while small checks wait an average of 0.8 week before being processed. Note that the less money is stuck at AR the better it is for the company.

Reference no: EM132207069

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