A company has started a phone service that uses overseas doctors to provide emergency medical consultations. The responding doctors are based in a country with low wages but with a highly skilled pool of physicians. Responding to each call takes on average 20 minutes. At any given moment in time, there are 3 doctors overseas on duty. Calls arrive every 5 minutes on average and standard deviation of the inter-arrival time is 5 minutes. The company receives $50 from the patient’s insurance company for each consultation. If one of the 3 overseas doctors is available, the firm pays $15 to the doctor and makes $35 in profit. If no doctor is available overseas, the call is rerouted to the U.S. where a local physician answers the question. A local physician is always available to take a call. In this case, the firm pays the $50 to the local physician, so there’s no profit for the company.

1. What is the percentage of calls being answered by a physician in the US?

2. How much (in $) does the company pay the physicians in the US over a 4 hour period?

3. What would be the cost saving per hour (in $) from paying less money to the US physicians, if 10 doctors are on duty overseas at any given time?