Project #94759 - Quantitive Methods of Management

Powerpoint is included in the attachments. Along with the worksheet.

 

WAITING LINES AND QUEUING THEORY MODELS

 

 

 

A company has one clerk answering the telephone and taking special orders from customers.  The company operates this system 12 hours each day. If the clerk is occupied on one line, incoming phone calls get a recording and the caller is asked to wait and is placed on hold.  As soon as the clerk is free, the party that has waited the longest is transferred and answered next.  Calls come in at an average rate of about 9 per hour (and this continues throughout the day).  The clerk is capable of handling an order in an average time of six minutes.  Calls tend to arrive following a Poisson distribution and service times tend to be exponentially distributed.  The clerk is paid $15 per hour, but because of lost goodwill and sales, the company loses about $50 per hour of customer time spent waiting for the clerk to become available. (The arrivals are assumed to be patient).

 

The company wishes to evaluate four possible situations:

(1)    the current situation with one employee.

(2)    hiring one additional clerk who is paid the same as the original worker and works at the same rate as the current one

(3)    hiring two additional clerks who are paid the same as the original worker and who each work at the same rate as the current one

(4)    replacing the current clerk with a worker who handles the orders more quickly.  This new worker averages only 3 minutes per call, but the cost per hour for this person is $25 per hour. 

 

Management wants to find the total time spent on hold by all of the customers in a day, the total daily waiting time cost, the total daily service cost, and the total daily cost of the queuing system for each of these four configurations.  Perform any calculations necessary and fill out the table.  Using Excel may help with some calculations, but these calculations can also be performed with a calculator.  There are some numbers already entered into the table to help with the more complex systems (Hint: Little’s Equations). 


 

 

1 clerk (current rate)

2 clerks

3 clerks

1 clerk  (faster rate)

Kendall notation for queuing system

 

 

 

 

l

 

 

 

 

m

 

 

 

 

# of service channels

 

 

 

 

P0

 

0.3793

0.4035

 

L

 

1.1285

0.9300

 

Lq  

 

 

 

 

W

 

 

 

 

Wq

 

 

 

 

 Cw

 

 

 

 

Cs  

 

 

 

 

Total time on hold by all customers in a day

 

 

 

 

Total daily waiting time cost

 

 

 

 

Total daily service cost

 

 

 

 

 

Total daily cost of queuing system

 

 

 

 

 

 

 

 

 

Subject Business
Due By (Pacific Time) 11/26/2015 12:00 am
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