Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

First Local Bank would like to improve customer service at its drive-in facility by reducing waiting and transaction times. On the basis of a pilot

First Local Bank would like to improve customer service at its drive-in facility by reducing waiting and transaction times. On the basis of a pilot study, the bank's process manager estimates the average rate of customer arrivals is 15 cars per hour. All arriving cars line up in front of a window and are served on a first-come, first-served basis. Each transaction requires on average 3 minutes to complete. Assume that the arrival of cars follows a Poisson process, and that the transaction times are exponentially distributed.

The bank now has one window that serves the drive-in customers. It costs $20 an hour to staff this window. The customer relations (CR) manager estimates that the cost (loss of goodwill and future business, etc.) due to a customer's waiting in the queue has a linear form, i.e., the bank incurs a cost of 10 dollars per hour per customer in queue. On the other hand, as soon as a customer goes into service, the bank does not incur any goodwill loss.

Question: Comparing to the two separate lines layout, what is the difference, if any, in the utilization of the service windows when using the single line layout? Explain the difference (or indifference) with intuition.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

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

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

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

Get Started

Recommended Textbook for

Quantitative Analysis For Management

Authors: Barry Render, Ralph M. Stair, Michael E. Hanna

11th Edition

9780132997621, 132149117, 132997622, 978-0132149112

More Books

Students also viewed these General Management questions