Customers arrive to check in at the exclusive and expensive Regency Hotels lobby at a rate of

Question:

Customers arrive to check in at the exclusive and expensive Regency Hotel’s lobby at a rate of 40 per hour (Poisson distributed). The hotel normally has three clerks available at the desk to check in guests. The average time for a clerk to check in a guest is 4 minutes (exponentially distributed). Clerks at the Regency are paid $24 per hour, and the hotel assigns a goodwill cost of $2 per minute for the time a guest must wait in line. Determine whether the present check-in system is cost-effective. If it is not, recommend what hotel management should do.

Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question
Question Posted: