Answered step by step
Verified Expert Solution
Question
1 Approved Answer
PETROGOL owns a filling station sited on a secondary road. It is equipped with a single petrol pump and has a restaurant and repair workshop.
PETROGOL owns a filling station sited on a secondary road. It is equipped with a single petrol pump and has a restaurant and repair workshop. The location of the pump is such that it only allows one vehicle to be filled at a time, and this means that a sale is lost if a customer arrives and finds the pump occupied as the availability of other service stations nearby means that customers do not wait. The filling station is open 8 hours a day, from Monday to Friday, 48 weeks a year. As the town is shortly to host the Provincial Hunting Championships it is expected that the area will come to be known as a hunter's paradise and the number of hunters visiting it will increase, along with petrol sales. PETROGOL believes that if the number of customers increases the problem of lost customers will worsen. Taking everything into account the cost of a lost sale if a customer finds the pump occupied and leaves is 10. The company wants to minimize this loss and so is studying the profitability of installing a second pump at a cost of 10,000. In order to make the investment worthwhile
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started