Atlantic Video, a small video rental store in Philadelphia, is open 24 hours a day, and--due to its proximity to a major business school--experiences customers arriving around the clock. A recent analysis done by the store manager indicates that there are 30 customers arriving every hour, with a standard deviation of interarrival times of 2 minutes. This arrival pattern is consistent and is independent of the time of day. The checkout is currently operated by one employee, who needs on average 1.7 minutes to check out a customer. The standard deviation of this check-out time is 3 minutes, primarily as a result of customers taking home different numbers of videos.
a. If you assume that every customer rents at least one video (i.e., has to go to the check- out), what is the average time a customer has to wait in line before getting served by the checkout employee, not including the actual checkout time (within 1 minute)?
b. If there are no customers requiring checkout, the employee is sorting returned videos, of which there are always plenty waiting to be sorted. How many videos can the employee sort over an 8-hour shift (assume no breaks) if it takes exactly 1.5 minutes to sort a single video? c. What is the average number of customers who are at the checkout desk, either waiting or currently being served (within 1 customer)?
d. Now assume for this question only that 10 percent of the customers do not rent a video at all and therefore do not have to go through checkout. What is the average time a customer has to wait in line before getting served by the checkout employee, not including the actual checkout time (within 1 minute)? Assume that the coefficient of variation for the arrival process remains the same as before.
e. As a special service, the store offers free popcorn and sodas for customers waiting in line at the checkout desk. The store owner estimates that every minute of customer waiting time costs the store 75 cents because of the consumed food. What is the optimal number of employees at checkout? Assume an hourly wage rate of $10 per hour.