Question
A small company can employ 3 workers. Each worker independently stays on the job for an exponentially distributed time with a mean of one year
A small company can employ 3 workers. Each worker independently stays on the job for an exponentially distributed time with a mean of one year and then quits. When a worker quits, it takes the company an exponentially distributed time with a mean of 1/10 of a year to hire a replacement for that worker (independently of how long it takes to replace other workers). If the company takes in $1000 per day in revenue when it has 3 workers, $800 per day when it has 2 workers, and $500 per day when it has 0 or 1 workers, what is the company's long-run average daily revenue?
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