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5. Elaine owns a computer rental store. The rental process can be depicted by the following process flow diagram. Repair 0.1R 0.1R 0.9R Inspection Rental

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5. Elaine owns a computer rental store. The rental process can be depicted by the following process flow diagram. Repair 0.1R 0.1R 0.9R Inspection Rental rate R Stock for rental Customer rental Return rate R Customer arrivals to the store with an average rate of R = 20 per week and each customer requests for one computer. The rental time is 3 weeks on average. The rental fee is $300 per week. At the end of the rental period, the customer returns his/her rented computer to the store. Elaine will inspect every returned computer. The inspection time is negligible. On average 10% of the returned computers need to be repaired by a technician (repair actually means re-configuration and minor repair). A computer that needs repair spends an average time of 1 week in the repair stage, including waiting and repair. After repair work is completed, the computer will be put into the stock for rental. Returned computers that don't need repair will be put immediately into the stock for rental. To ensure that there are always computers available to satisfy customer requests, Elaine has to keep an average of 10 computers in the stock for rental. (a) What is the total number of computers that Elaine needs for her rental business? (5 points) (b) With an average of 10 computers in the stock for rental, on average how much time does a computer spend in the stock for rental before it is rented by a customer? (5 points) (c) Elaine estimates that the average rental time will become 2 weeks if she increases the rental fee to $500 per week. The customer arrival rate, the repair time and the percentage of returned computers that need repair will remain the same. Again, she needs to have an average of 10 computers in the stock for rental. Should she increase the rental fee? Justify your answer by considering the number of computers required and the expected revenue per week. (5 points)

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