A repairman is to be hired by a company to repair machines that break down following a Poisson process, with an average rate of four per hour. The cost of non-productive machine time is Sh. 90 per hour. The company has the option of choosing either a fast or a slow repairman. The fast repairman charges Sh. 70 per hour and will repair machines at an average rate of 7 per hour, while the slow repairman charges Sh. 50 per hour and will repair machines at an average rate of 6 per hour. Determine the repairman who should be hired?

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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a) A repairman is to be hired by a company to repair machines that break down following a
Poisson process, with an average rate of four per hour. The cost of non-productive machine
time is Sh. 90 per hour. The company has the option of choosing either a fast or a slow
repairman. The fast repairman charges Sh. 70 per hour and will repair machines at an average
rate of 7 per hour, while the slow repairman charges Sh. 50 per hour and will repair machines
at an average rate of 6 per hour. Determine the repairman who should be hired?
Transcribed Image Text:a) A repairman is to be hired by a company to repair machines that break down following a Poisson process, with an average rate of four per hour. The cost of non-productive machine time is Sh. 90 per hour. The company has the option of choosing either a fast or a slow repairman. The fast repairman charges Sh. 70 per hour and will repair machines at an average rate of 7 per hour, while the slow repairman charges Sh. 50 per hour and will repair machines at an average rate of 6 per hour. Determine the repairman who should be hired?
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