Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

RentAPhone is a new service company that provides European mobile phones to American visitors to Europe. The company currently has 1 1 5 phones available

RentAPhone is a new service company that provides European mobile phones to American visitors to Europe. The company currently has 115 phones available at Charles de Gaulle Airport in Paris. There are, on average, 26 customers per day requesting a phone. These requests arrive uniformly throughout the 24 hours the store is open. (Note:This means customers arrive at a faster rate than 1 customer per hour.) The corresponding coefficient of variation is 1.
Customers keep their phones on average 96 hours. The standard deviation of this time is 108 hours.
Given that RentAPhone currently does not have a competitor in France providing equally good service, customers are willing to wait for the telephones. Yet, during the waiting period, customers are provided a free calling card. Based on prior experience, RentAPhone found that the company incurred a cost of $1.50 per hour per waiting customer, independent of day or night.
(a) What is the average number of telephones the company has in its store? (Round your answer to nearest whole number.)
(b) How long does a customer, on average, have to wait for the phone? (Do not round intermediate calculations. Round your answer to two decimal places.)
(c) What are the total monthly (30 days) expenses for telephone cards? (Do not round intermediate calculations. Round your answer to two decimal places.)
(d) Assume RentAPhone could buy additional phones at $1,200 per unit. Is it worth it to buy one additional phone?
(e) How would waiting time change if the company decides to limit all rentals to exactly 96 hours? Assume that if such a restriction is imposed, the number of customers requesting a phone would be reduced to 25 customers per day. (Do not round intermediate calculations Round your answer to five decimal places.)

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

Step: 3

blur-text-image

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

Organization Theory And Public Management

Authors: Jonathan R. Tompkins

1st Edition

053417468X, 978-0534174682

More Books

Students also viewed these General Management questions

Question

1. What are your creative strengths?

Answered: 1 week ago

Question

What metaphors might describe how we work together?

Answered: 1 week ago