An auto-rental agency has two employees at its service, Ask an Expert

Management Studies

An auto-rental agency has two employees at its service counter. Customers arrive at an average rate of 18 per hour. The service times mean a service rate of 15 customers per hour. The coefficients of variation of the inter-arrival times and the service times are both equal to 1.

a. What are the appropriate measures of service for this facility?

b. Each additional customer gives the agency $15 in additional contribution (assuming current costs are held constant). If the average waiting time overall could be reduced 75%, two more customers per hour would be drawn from competing auto-rental agencies. Should additional employees be hired for $12 an hour?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M91645570

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