An Introduction to Management Science 13th Edition by David Anderson,Dennis Sweeney ,Thomas Williams ,Jeffrey Camm, Kipp Martin

Exercise 12

The Robotics Manufacturing Company operates an equipment repair business where emergency jobs arrive randomly at the rate of three jobs per 8-hour day. The company's repair faculty is a single-channel system operated by a repair technician. The service time varies, with a mean repair time of 2 hours and a standard deviation of 1.5 hours. The company's cost of the repair operation is $28 per hour. In the economic analysis of the waiting line system, Robotics uses $35 per hour cost for customers waiting during the repair process.
a. What, are the arrival rate and service rate in jobs per hour?
b. Show the operating characteristics including the total cost per hour.
c. The company is considering purchasing a computer-based equipment repair system that would enable a constant repair time of 2 hours. For practical purposes, the standard deviation is 0. Because of the computer-based system, the company's cost of the new operation would be $32 per hour. The firm's director of operations said no to the request for new system because the hourly cost is $4 higher and the mean repair time is the same. Do you agree? What effect will the new system have on the waiting line characteristics of the repair service?
d. Does paying for the computer-based system to reduce the variation in service time make economic sense? How much will the new system save the company during a 40-hour workweek?