Q. Rent Phone is a new service Corporation which gives European mobile phones to American visitors to Europe. The Corporation presently has 80 phones available at Charles de Gaulle Airport in Paris. There are, on average, 25 customers per day requesting a phone. These requests arrive uniformly throughout the 24 hours the store is open.(Note: this means customers arrive at a faster rate than 1 customer per hour.) the corresponding coefficient of variation is 1. Customers keep their phones on average 72 hours. The standard deviation of this time is 100 hours. Giving which Rent Phone presently does not have a competitor in France providing equally good service; customers are willing to wait for the telephones. Yet, during the waiting period, customers are giving a free calling card. Based on prior experience, Rent Phone found which the Corporation incurred a cost of $1 per hour per waiting customer, independent of day or night.

a. Elucidate what is the average number of telephones the Corporation has its store?

b. Describe how long does a customer, on average, have to wait for the phone?

c. Elucidate what are the total monthly (30 days) expenses for telephone cards?

d. Suppose rent phone could buy additional phones at 1000 per unit. Is it worth it to buy one additional phone? Why?

e. Describe how would waiting time change if the Corporation decides to limit all rentals to exactly 72 hours? Suppose which if such a restriction is imposed, the number of customers requesting a phone would be reduced to 20 customers per day?