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A graphics reproduction firm has four units of equipment that are automatic but occasionally become inoperative because of the need for supplies, maintenance, or repair. Each unit requires service roughly twice each hour, or, more precisely, each unit of equipment runs an average of 30 minutes before needing service. Service times vary widely, ranging from a simple service (such as pressing a restart switch or repositioning paper) to more involved equipment disassembly. The average service time, however, is five minutes. Equipment downtime result in a loss of $20 per hour. The one equipment attendant is paid $6 per hour.

The firm is considering adding another attendant at the same $6 rate. should the firm do it?

Operation Management, Management Studies

  • Category:- Operation Management
  • Reference No.:- M92473608

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