A new shopping mall is considering setting up an information desk manned by one employee. Based upon information obtained from similar information desks, it is believed that people will arrive at the desk at a rate of 15 per hour. It takes an average of 3 minutes to answer a question. It is assumed that the arrivals follow a Poisson distribution, and answer times are exponentially distributed. Assume that the information desk employee earns $10 per hour. The cost of waiting time, in terms of customer unhappiness with the mall, is $12 per hour of time spent waiting in line.

a) Find the average time a customer spends waiting in the queue.

b) Find the total expected costs over an 8-hour day.

A firm specializing in agricultural products wants to conduct a market trial for one of its new products. A random sample of 600 potential customers is chosen to receive advertising material describing the new product.

It is decided that additional advertising and promotion will occur only if the sample results provide strong evidence that the actual (population) response rate will exceed 7%.

What decision will be made if 50 out of the 600 people make a purchase? Test using = 0.05