Reference no: EM132157365

A fast-food franchise is considering operating a drive-up window food-service operation. Assume that customer arrivals follow a Poisson probability distribution, with an arrival rate of 25 cars per hour, and that service times follow an exponential probability distribution. Arriving customers place orders at an intercom station at the back of the parking lot and then drive to the service window to pay for and receive their orders. The following three service alternatives are being considered:

System A: A single-server operation in which one employee fills the order and takes the money from the customer. The average service time for this alternative is 2 minutes.

System B: A single-server operation in which one employee fills the order while a second employee takes the money from the customer. The average service time for this alternative is 1.2 minutes.

System C: A two-server operation with two service windows and two employees. The employee stationed at each window fills the order and takes the money for customers arriving at the window. The average service time for this alternative is 2.5 minutes for each server.

The following cost information is available. Customer waiting time is valued at $26 per hour to reflect the fact that waiting time is costly to the fast-food business. The cost of each employee is $5.5 per hour. To account for equipment and space, an additional cost of $22 per hour is attributable to each server.

What is the lowest-cost design for the fast-food business? If required, round your answers to two decimal places.

Total Cost

System A $

SystemB $

SystemC $

System is the most economical.