Webflux is an Internet-based DVD rental business specializing in hard- to-find, obscure films. Its operating model is
Question:
a. What is the average time that a customer has to wait to receive Sundown, the Vampire in Retreat DVD after the request? Recall it takes 1 day for a shipped DVD to arrive at a customer address (i.e., in your answer, you have to include the 1-day shipping time).
b. On average, how many customers are in Webflux's internal queue for Sundown? Assume customers do not cancel their items in their shopping carts. Thanks to David Carradine's renewed fame after the recent success of Kill Bill Vol. I and II which he starred in, the demand for Sundown has spiked. Now the average interarrival time for the DVD requests at Webflux is 3 days. Other numbers (coefficient of variation, time in a customer's possession, shipping time) remain unchanged. For the following question only, assume sales are lost for customers who encounter stockouts; that is those who cannot find a DVD on the Webflux Web site simply navigate away without putting it in the shopping cart.
c. To satisfy the increased demand, Webflux is considering acquiring a second copy of the Sundown DVD. If Webflux owns a total of two copies of Sundown DVDs (whether in Webflux's internal stock, in customer's possession, or in transit), what percentage of the customers are turned away because of a stockout?
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Related Book For
Matching Supply with Demand An Introduction to Operations Management
ISBN: 978-0073525204
3rd edition
Authors: Gerard Cachon, Christian Terwiesch
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