Bullseye Department Store Bullseye Department store is a discount retailer of general merchandise in the Southeastern United States. The company owns more than 50 stores in Florida, Georgia, South Carolina, and Tennessee that are serviced by the company's main warehouse near Statesboro, GA.

Most of the merchandise received at the warehouse arrives in trucks from ports in Jacksonville, FL, and Savannah, GA. Trucks arrive at the warehouse following a Poisson process with a rate of once every 7 minutes. Eight loading docks are available at the warehouse. A single worker mans each dock and is able to unload a truck in approximately 30 minutes on average. When all the docks are occupied, arriving trucks wait in a queue until one becomes available.

Bullseye has received complaints from some of the trucking firms that deliveries are taking too long at the warehouse. In response, Bullseye is considering a number of options to try to reduce the time trucks must spend at the warehouse.

One option is to hire an extra worker for each of the loading docks. This is expected to reduce the average time it takes to unload a truck to 18 minutes. It costs approximately $17 per hour in salary and benefits to employ each additional worker.

Alternatively, the company can continue to use a single worker at each loading dock but upgrade the forklift equipment workers use to unload trucks. The company can replace the existing forklift equipment with a new model that can be leased for $6 per hour and is expected to reduce the average time required to unload a truck to 23 minutes.

Finally, the company can build two new loading docks for a capitalized cost of $6 per hour and hire two additional workers at a rate of $17 per hour to man these locations. Bullseye estimates it costs $60 in goodwill for each hour a truck spends at the warehouse. Which, if any, of the three alternatives would you recommend Bullseye implement?

(1) Find arrival rate, service rate, number of servers and expected time in the system before a few options are considered for improvement.

(2) For each of the three options considered by Bullseye, calculate service rate, expected time in the system, additional cost, goodwill gained and net cost.

(3) Make recommendation based on your findings in (2).