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A/C R Us Inc. plans to offer a flat fee ready for winter service. The complete process of getting to the destination and servicing the unit is expected to take 2 hours. Each crew assigned to this offer costs $35/hour and they plan to operate for 8 hours per day. They plan to offer this service for 20 working days. If they offer the service at $200/service, they expect 220 service requests for the complete duration of the offer (20 days). If they offer the service at $240/service, they expect 164 service requests for the complete 20 days. Assume a waiting cost of $45/hour and exponential service and arrival times. What offer should this company make (price per service) and how many crews should they use to optimize the contribution to profits from this ready for winter service offer? Provide all summary cost calculations for the 20 day period. Organize the solution as a table. Have clear/ organized/ professional presentation.

Operation Management, Management Studies

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