The Canadian Western Bank currently has one out-side drive-up teller. It takes the teller an average of
Question:
The Canadian Western Bank currently has one out-side drive-up teller. It takes the teller an average of three minutes (exponentially distributed) to serve a bank customer. Customers arrive at the drive-up window at the rate of 12 per hour (Poisson distributed). The bank operations officer is currently analyzing the possibility of adding a second drive-up window at an annual cost of $20,000. It is assumed that arriving cars would be equally divided between both windows. The operations officer estimates that each minute’s reduction in customer waiting time would increase the bank’s revenue by $2000 annually. Should the bank install the second drive-up window? What other factors should be considered in the decision besides cost?
Step by Step Answer:
Operations Management Creating Value Along the Supply Chain
ISBN: 978-1118301173
1st Canadian Edition
Authors: Roberta S. Russell, Bernard W. Taylor, Ignacio Castillo, Navneet Vidyarthi