Problem:

An automobile brake supplier receives an average of 1,000 orders per week. An average of 500 orders are waiting to be processed.

Required:

Question 1) What is the average time spent by each order waiting to be processed?

Question 2) Assume that the orders coming in are either small or large. Small orders are for an average of $500 and large orders are for an average of $5,000; 20% of the orders coming in are large with the rest being small. Currently, no distinction is made between the large and small orders. As a result, 20% of the orders waiting to be processed are large.

Question 3) Is it worth reallocating resources so that large orders wait an average of 0.3 weeks while small orders wait an average of 0.7 weeks before being processed?

Solve the given numerical problem and illustrate step by step calculation.