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The Judy Gray Income Tax Service is analyzing its customer service operations during the month prior to the April filing deadline. On the basis of
The Judy Gray Income Tax Service is analyzing its customer service operations during the month prior to the April filing deadline. On the basis of past data, it has been estimated that customers arrive according to a Poisson process with an average arrival rate of per hour. The time to complete a return for a customer is exponentially distributed with a mean of minutes. Assume that the customer has all of the information needed for Judy to complete the tax return at this one visit. When the person is being helped, she meets with Judy in her office. If the individual is waiting for help, she will be in the waiting area. Judy is now considering adding a person to help her process the tax returns. This person will help Judy by checking the paper work for the customers but does not work directly with any customer. Judy believes that this will allow her Judy to complete the returns in six minutes seconds on average. Judy would need to pay this person $ per hour. Judy believes that she has to reduce her cost of the service by $ per hour for every hour a customer is in her office either waiting for help or being helped. Should she add this person or continue working by herself? Base your analysis on the economics of the two options.
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