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a) The A&C shopping Mall is a busy centre for residents in East Legon and its surrounding community. Assume that 2 customers arrive every 12
a) The A\&C shopping Mall is a busy centre for residents in East Legon and its surrounding community. Assume that 2 customers arrive every 12 minutes and 3 customers are served every 15 minutes and that currently, there is only one cashier. What will be is the average waiting time in minutes before service begins? b) Management perceives that the waiting time computed in (a) above is not acceptable and is faced with two options. Management can either employ an assistant for the cashier or open a second cash machine. The former, if implemented, will enable 4 requests to be served every 15 minutes and the assistant will receive a monthly salary of GHC160. The latter, if implemented, will improve the arrival rate to 1 customer every 12 minutes. However, it requires an initial capital outlay of GH$3,000 and the cashier who will man the cash machine will receive a monthly salary of GHc250. The shop avoids a loss in sales of GHc80.00 per month for each minute that average customer waiting time is reduced. (i) Evaluate the financial gain to A&C under option 1 and advise management on this option c) Using the scenario in (b), evaluate the financial gain to A\&C under option 2, assuming the initial capital outlay is sunk cost and advise management on this option d) Base on the information given in (b), Assuming the initial capital outlay is sunk cost, which option would you recommend to management of A\&C and why? After how many months would management be indifferent between the two options
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