4. (25 Points Total] Kashvi is a nutritionist and entrepreneur, she started a business called Nutri Now in which customers can purchase an annual membership for $500 to receive unlimited customized meal plans designed by Kashvi and her team. Each meal plan takes an average of 2 hours to develop and has enough variety in it so that the customers can use the meal plan for as long as they like (where development time is exponentially distributed). However, customers can request new meal plans as often as they want, and, on average, each customer requests a new meal plan 1 month (30 days) after receiving their most recent meal plan, with exponentially distributed interarrival times. Because her customers come from many different countries, Kashvi has partnered with some of her nutritionist friends in different timezones so that one nutritionist is always available for customers to contact, regardless of the time of day. (Each nutritionist is paid $15/hour.) This global perspective and around-the-clock access to a nutritionist made NutriNow popular very fast. As a result, Kashvi decided she needed to limit the number of customers that can purchase an annual membership in order to not become overwhelmed with the number of meal plans that need to be created. (Kashvi measures how overwhelmed the system is by whether or not the average time to complete each meal plan request, from the time the request arrived, is less than 1 day). From prior experience, she knows that having 300 customers enrolled in the annual membership allows NutriNow to, on average, complete each meal plan request within 1 day of the request being placed (but since she doesn't know queueing theory, she doesn't know if allowing additional customers to purchase the annual plan would still enable Nutri Now to complete requests within this timeframe 1 day). Kashvi wants to grow NutriNow and is considering the following options: Option 1: Hire additional nutritionists so that there will always be 2 nutritionists working at Nutri Now, regardless of the time of day. Under this plan, Kashvi would increase the number of customers who could purchase the annual membership to 600. Option 2: Create two meal plans for each customer each time a request is made. Kashvi anticipates this would decrease the frequency at which customers request new meal plans to be created to 1 request every 2 months (60 days). However, it would also take nutritionists longer-Kashvi anticipates that it would take an average of 4 hours for a nutritionist to develop 2 new meal plans for each request once the nutritionist starts working on the request. This option does not cost Kashvi anything to implement. Option 3: Invest in a software system that reduces the average time it takes for a nutritionist to develop a meal plan to 1 hour per request once the nutritionist starts working on the request. Kashvi is comfortable with allowing a maximum of 700 customers to enroll in the annual plan if the software system is purchased. The software has an annual licensing fee of $180,000 Option 4: Because there is so much demand for NutriNow, Kashvi is adding another service for annual members: an exercise plan. She believes that customers will be willing to pay $750 per year for the updated membership plan (she will no longer be offering the $500 plan) and that she will still be able to sell 300 annual memberships. Exercise plans are similar to the meal plans, customers can request a new exercise plan as often as they want and time it takes the nutritionists to complete a new exercise plan follows the same distribution as the meal plan. However, Kashvi assumes that, for each customer, the average time between when nutritionists complete a request and a new request is (for either a new meal plan or a new exercise plan) is 25 days. a) Use the attached excel document and table below to analyze NurtriNow's annual profit and average number of days customers will have to wait for their request to be completed (Assume 365 days in a year.) Which option do you recommend to Kashvi? Option Limit on # of Customers Allowed to Purchase Annual Plan #of nutritionists working at any given time Average # of Days to Complete Request from the Time Request is Placed Annual Revenue Annual Expense Annual Profit Current Option 1: Hire additional nutritionist Option 2: Create 2 meal plans Option 3: Purchase Software Option 4: Exercise Plan b) Since it doesn't cost anything to implement, Kashvi thinks she should choose Option 2. Explain why this may not be a good choice. c) Consider what you know about NutriNow's current expected total time to complete each meal plan request, from the time the request arrived. How could Kashvi increase her profits without incurring any additional costs? How much would her profits increase by? (Hint: There is a way for Kashvi to increase her profits that isn't listed as one of the bulleted options above.) 4. (25 Points Total] Kashvi is a nutritionist and entrepreneur, she started a business called Nutri Now in which customers can purchase an annual membership for $500 to receive unlimited customized meal plans designed by Kashvi and her team. Each meal plan takes an average of 2 hours to develop and has enough variety in it so that the customers can use the meal plan for as long as they like (where development time is exponentially distributed). However, customers can request new meal plans as often as they want, and, on average, each customer requests a new meal plan 1 month (30 days) after receiving their most recent meal plan, with exponentially distributed interarrival times. Because her customers come from many different countries, Kashvi has partnered with some of her nutritionist friends in different timezones so that one nutritionist is always available for customers to contact, regardless of the time of day. (Each nutritionist is paid $15/hour.) This global perspective and around-the-clock access to a nutritionist made NutriNow popular very fast. As a result, Kashvi decided she needed to limit the number of customers that can purchase an annual membership in order to not become overwhelmed with the number of meal plans that need to be created. (Kashvi measures how overwhelmed the system is by whether or not the average time to complete each meal plan request, from the time the request arrived, is less than 1 day). From prior experience, she knows that having 300 customers enrolled in the annual membership allows NutriNow to, on average, complete each meal plan request within 1 day of the request being placed (but since she doesn't know queueing theory, she doesn't know if allowing additional customers to purchase the annual plan would still enable Nutri Now to complete requests within this timeframe 1 day). Kashvi wants to grow NutriNow and is considering the following options: Option 1: Hire additional nutritionists so that there will always be 2 nutritionists working at Nutri Now, regardless of the time of day. Under this plan, Kashvi would increase the number of customers who could purchase the annual membership to 600. Option 2: Create two meal plans for each customer each time a request is made. Kashvi anticipates this would decrease the frequency at which customers request new meal plans to be created to 1 request every 2 months (60 days). However, it would also take nutritionists longer-Kashvi anticipates that it would take an average of 4 hours for a nutritionist to develop 2 new meal plans for each request once the nutritionist starts working on the request. This option does not cost Kashvi anything to implement. Option 3: Invest in a software system that reduces the average time it takes for a nutritionist to develop a meal plan to 1 hour per request once the nutritionist starts working on the request. Kashvi is comfortable with allowing a maximum of 700 customers to enroll in the annual plan if the software system is purchased. The software has an annual licensing fee of $180,000 Option 4: Because there is so much demand for NutriNow, Kashvi is adding another service for annual members: an exercise plan. She believes that customers will be willing to pay $750 per year for the updated membership plan (she will no longer be offering the $500 plan) and that she will still be able to sell 300 annual memberships. Exercise plans are similar to the meal plans, customers can request a new exercise plan as often as they want and time it takes the nutritionists to complete a new exercise plan follows the same distribution as the meal plan. However, Kashvi assumes that, for each customer, the average time between when nutritionists complete a request and a new request is (for either a new meal plan or a new exercise plan) is 25 days. a) Use the attached excel document and table below to analyze NurtriNow's annual profit and average number of days customers will have to wait for their request to be completed (Assume 365 days in a year.) Which option do you recommend to Kashvi? Option Limit on # of Customers Allowed to Purchase Annual Plan #of nutritionists working at any given time Average # of Days to Complete Request from the Time Request is Placed Annual Revenue Annual Expense Annual Profit Current Option 1: Hire additional nutritionist Option 2: Create 2 meal plans Option 3: Purchase Software Option 4: Exercise Plan b) Since it doesn't cost anything to implement, Kashvi thinks she should choose Option 2. Explain why this may not be a good choice. c) Consider what you know about NutriNow's current expected total time to complete each meal plan request, from the time the request arrived. How could Kashvi increase her profits without incurring any additional costs? How much would her profits increase by? (Hint: There is a way for Kashvi to increase her profits that isn't listed as one of the bulleted options above.)