Question 1: TransylvaniaHotel

Hyatt hotel is considering changing its waiting line system. In the current system, hotel guests divide themselves equally between the lines that form in front of 4 hotel clerks. The manager is considering having hotel guests wait in one line and then proceed to the next available clerk. If the service rate is 8 customers per hour and the average number of arrivals per hour is 12 guests, determine which system results in the lowest customer waiting time (average time a customer spends waiting in the queue).

Hint: The current system consists of four single-server queues, but the proposed system is a multiple-server queue with four servers.

Question 2: Construction Company

A construction company must decide on the size of the shopping mall, i.e. Large, Medium or Small, that has to be constructed in their acquired plot in the sub-urban area of Chicago. Due to the market conditions, the number of visitors to the mall will be High, Moderate, or Low. The level of response and the size of the mall will decide the return of investment from the mall. The profit payoff table for management (in millions of dollars) after 5 years is provided below.

	Number of visitors
Size of the mall	High	Moderate	Low
Large	25	15	-20
Medium	20	12	-10
Small	15	13	5

The probabilities for the state of nature are P(High) = 0.35, P(Moderate) = 0.50, and P(Low) = 0.25.

A test market study of the potential response for the mall in that area is expected to report either a favorable (F) or unfavorable (U) condition. The relevant conditional probabilities are as follows:

P(F|High) = 0.4; P(U|High) = 0.6

P(F|Moderate) = 0.6; P(U|Moderate) = 0.4

P(F|Low) = 0.20; P(U|Low) = 0.80

1. Determine the decision strategy the construction company should follow (using the expected value criterion) and the expected value of this strategy.
2. What is the efficiency of the information provided by the test market study?