Reference no: EM132295260

The Acme Vending Company services vending machines for a large university on the west coast. Because students kick the machines at every opportunity out of anger and frustration, Acme management has a constant repair problem. According to MBA students who studied the machines as part of their Operations Management course, vending machines on the campus break down on an average of four per hour, and the breakdowns are distributed in a Poisson manner. Downtime costs $45/hour per machine, and each maintenance worker earns $20 per hour.  Acme owns one repair truck which can be staffed by one, two, or three workers.  One worker can service machines at an average rate of five per hour, distributed exponentially; two workers, working together, can service seven per hour, distributed exponentially; and a team of three workers can service eight per hour. Acme earnings have not been strong in recent times and they cannot afford another repair truck at this time.

What is the optimal maintenance crew for servicing vending machines?

Hint 1: No matter how many workers there are in a crew, they always work as one unit. Hence, the question is about how big the crew should be, not how many crews to have.

Hint 2: To calculate the total “waiting cost” (i.e. cost due to machine downtime), please refer to Examples 5, 6 and 7 in the “example problems and solution” posted on Canvas alongside this assignment.