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RentAPhone is a new service company that provides European mobile phones to American visitors to Europe. The company currently 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 that RentAPhone currently 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 provided a free calling card. Based on prior experience, RentAPhone found that the company incurred a cost of $1 per hour per waiting customer, independent of day or night.

problem: how would waiting time change if the company decides to limit all rentals to exactly 72 hours?

Operation Management, Management Studies

  • Category:- Operation Management
  • Reference No.:- M978517

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