Solution step by step needed (how to calculate arrival rate, service rate and etc.)
) Case 1: Teahouse Triple Tea is open every day from 11.00 to 23.00. On the average, it serves some 102 customers' orders every day. Currently three waiters attend to customers. Each of them on the average spends about 12.5 minutes dealing with customer's order. Waiters are paid 21 per hour (including all taxes) each. Customer satisfaction surveys indicate that ,, Triple Tea suffers approx. 5 in sales and goodwill for every 10 minutes of customer time spent waiting for his/her order being collected and delivered. Therefore, the Triple Tea management in deciding how many waiters to employ considers two factors: first, customer waiting time (and the associated waiting cost) and, second, costs of service (operating costs). The ever-increasing competition makes Triple Tea managers worry about the decrease in customer numbers in the future. The observed trend indicates that it is highly likely that the number of customer orders will slump down by 20% in the nearby future. Triple Tea manager considers three alternatives of response to deal with this situation, namely: 1) To fire one waiter. 2) To fire one waiter, but at the same time to implement technical improvements that would enable faster processing of customer orders; it is estimated that contemplated technical modernization would increase operating costs by 5 per hour and will raise service efficiency (avg. customer service rate) of each remaining waiter by 10%. 3) To fire two waiters and fully computerize the service of teahouse clients. It is predicted that this option would increase operating costs by 30 per hour, but it will increase the average customer service rate of the remaining waiter by 125%. Which alternative would you advice to take - and why? [60 points] " -- ) Case 1: Teahouse Triple Tea is open every day from 11.00 to 23.00. On the average, it serves some 102 customers' orders every day. Currently three waiters attend to customers. Each of them on the average spends about 12.5 minutes dealing with customer's order. Waiters are paid 21 per hour (including all taxes) each. Customer satisfaction surveys indicate that ,, Triple Tea suffers approx. 5 in sales and goodwill for every 10 minutes of customer time spent waiting for his/her order being collected and delivered. Therefore, the Triple Tea management in deciding how many waiters to employ considers two factors: first, customer waiting time (and the associated waiting cost) and, second, costs of service (operating costs). The ever-increasing competition makes Triple Tea managers worry about the decrease in customer numbers in the future. The observed trend indicates that it is highly likely that the number of customer orders will slump down by 20% in the nearby future. Triple Tea manager considers three alternatives of response to deal with this situation, namely: 1) To fire one waiter. 2) To fire one waiter, but at the same time to implement technical improvements that would enable faster processing of customer orders; it is estimated that contemplated technical modernization would increase operating costs by 5 per hour and will raise service efficiency (avg. customer service rate) of each remaining waiter by 10%. 3) To fire two waiters and fully computerize the service of teahouse clients. It is predicted that this option would increase operating costs by 30 per hour, but it will increase the average customer service rate of the remaining waiter by 125%. Which alternative would you advice to take - and why? [60 points]
