Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A small equipment rental facility has nine appliance dollies. There are 14 customers every day who request this equipment. If the equipment is not available,

A small equipment rental facility has nine appliance dollies. There are 14 customers every day who request this equipment. If the equipment is not available, they leave and go to a competing rental facility. Customers arrive evenly over a 12-hour period (6am to 6pm), 7 days per week. The average rental duration is 6 hours. a. What is the likelihood that a customer going to the rental facility will find an appliance dolly available?

b. Assume each 6-hour rental is $10. How much revenue does the store make per week from the dollies?

c. Assume that a promotional campaign gives gift card worth $5 if the dolly is unavailable. What is the total gift card value that the store will have to issue on average per week?

d. What would be the payback time (not considering interest rates) in days for purchasing an additional dolly at $200?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions