Jimmy’s Suit House (JSH) rents out designer apparel to customers who want to wear formal suits on special events but are unwilling to purchase them. For example, a customer can rent a $1,000 suit for $25 per day for a 10-day rental period. To rent a suit, a customer visits the JSH website, which shows the available suits and their rental prices. The number of webpage views is surprisingly large, but not everyone finally rents. Many leave the website because of not finding the suits they like. On average, JSH sees the demand of 200 rental orders per day. To ensure that enough customers find suits, JSH keeps 1,600 suits in their Rental-Ready Inventory, including different styles and sizes. This number must be substantial due to the variety of suits JSH keeps and the policy that JSH ships two suits (same style in two different sizes) to satisfy a customer’s request for one suit. When taking a rental order, JSH requires that a customer specify two sizes for the requested suit—the most likely and the second most likely size. This policy minimizes the customer’s hassle in returning a suit because of fit issues. Once a customer places a rental order, two suits (one style in two sizes) are sent to the customer via UPS next-day delivery (one-day shipping, which costs $4/order, borne by JSH). At the end of the rental period, the customer returns the two suits in a pre-labeled UPS package. Return shipping takes one day and also costs $4/order, borne by JSH. Upon its return, a suit is first inspected and classified as either good or damaged. JSH hires workers to inspect and classify the returned suits. On average, 70% of the returned suits are in good condition and only require basic cleaning. Such basic cleaning is performed at RapidClean laundry located next to JSH’s fulfillment center. RapidClean charges $5 for cleaning each suit. After cleaning, the suits are placed back in the Rental-Ready Inventory immediately. Damaged suits require more rigorous cleaning or some repair. These suits are sent across town to PerfectClean laundry, which specializes in repairing such suits. Because PerfectClean is much farther away, JSH typically batches a number of suits before sending them to PerfectClean. PerfectClean charges $10 for cleaning each suit. After cleaning, PerfectClean also batches the cleaned and repaired suits before sending them back to JSH. Then, JSH receives the suits from PerfectClean, and these suits are placed back in the Rental-Ready Inventory. Customers typically want suits from the current fashion trends (and without any wear and tear). To meet this need, JSH regularly purchases new suits and writes off old suits. An average new suit costs JSH $600 (substantially discounted from the average retail price of $1,000). A new suit has an average life of 120 rental days. JSH depreciates the cost of a new suit over 120 days in a straight- line fashion (this is the same as saying that JSH incurs $600/120 = $5 per day on each suit it owns). Additional Information: An internal audit conducted by JSH uncovered the following information about internal processing at the fulfillment center. 1. RapidClean takes a day to perform basic cleaning of a returned “good” suit. 2. On average, each worker can inspect 15 suits per day. JSH hires 30 workers to make sure the inspection capacity is sufficient, and the wage of each worker is $120/day. Based on the capacity, the average flow time in the inspection station is 3 days. 3. Suits identified as damaged need to wait for a while before they are sent to PerfectClean due to batching. On average, there are 150 suits waiting to be sent to PerfectClean. 4. After receiving suits, PerfectClean takes an average of 2 days to repair and clean them. The cleaned suits also need to wait before returning to JSH due to batch delivery, and there are 150 such suits at PerfectClean waiting to be sent back. 5. The time to ship suits to/from RapidClean can be assumed to be negligible (zero). It takes 0.5 days to ship suits to/from PerfectClean after batching. There is no shipping cost to/from RapidClean and PerfectClean. QUESTION: If JSH wants to reduce the number of inspection workers, what is the minimum number of workers required to ensure the capacity is sufficient?
Jimmy’s Suit House (JSH) rents out designer apparel to customers who want to wear formal suits on special events but are unwilling to purchase them. For example, a customer can rent a $1,000 suit for $25 per day for a 10-day rental period.
To rent a suit, a customer visits the JSH website, which shows the available suits and their rental prices. The number of webpage views is surprisingly large, but not everyone finally rents. Many leave the website because of not finding the suits they like. On average, JSH sees the demand of 200 rental orders per day. To ensure that enough customers find suits, JSH keeps 1,600 suits in their Rental-Ready Inventory, including different styles and sizes. This number must be substantial due to the variety of suits JSH keeps and the policy that JSH ships two suits (same style in two different sizes) to satisfy a customer’s request for one suit. When taking a rental order, JSH requires that a customer specify two sizes for the requested suit—the most likely and the second most likely size. This policy minimizes the customer’s hassle in returning a suit because of fit issues. Once a customer places a rental order, two suits (one style in two sizes) are sent to the customer via UPS next-day delivery (one-day shipping, which costs $4/order, borne by JSH). At the end of the rental period, the customer returns the two suits in a pre-labeled UPS package. Return shipping takes one day and also costs $4/order, borne by JSH.
Upon its return, a suit is first inspected and classified as either good or damaged. JSH hires workers to inspect and classify the returned suits. On average, 70% of the returned suits are in good condition and only require basic cleaning. Such basic cleaning is performed at RapidClean laundry located next to JSH’s fulfillment center. RapidClean charges $5 for cleaning each suit. After cleaning, the suits are placed back in the Rental-Ready Inventory immediately. Damaged suits require more rigorous cleaning or some repair. These suits are sent across town to PerfectClean laundry, which specializes in repairing such suits. Because PerfectClean is much farther away, JSH typically batches a number of suits before sending them to PerfectClean. PerfectClean charges $10 for cleaning each suit. After cleaning, PerfectClean also batches the cleaned and repaired suits before sending them back to JSH. Then, JSH receives the suits from PerfectClean, and these suits are placed back in the Rental-Ready Inventory.
Customers typically want suits from the current fashion trends (and without any wear and tear). To meet this need, JSH regularly purchases new suits and writes off old suits. An average new suit costs JSH $600 (substantially discounted from the average retail price of $1,000). A new suit has an average life of 120 rental days. JSH
Additional Information: An internal audit conducted by JSH uncovered the following information about internal processing at the fulfillment center.
1. RapidClean takes a day to perform basic cleaning of a returned “good” suit.
2. On average, each worker can inspect 15 suits per day. JSH hires 30 workers to make sure the inspection capacity is sufficient, and the wage of each worker is $120/day. Based on
the capacity, the average flow time in the inspection station is 3 days.
3. Suits identified as damaged need to wait for a while before they are sent to PerfectClean due to batching. On average, there are 150 suits waiting to be sent to PerfectClean.
4. After receiving suits, PerfectClean takes an average of 2 days to repair and clean them. The cleaned suits also need to wait before returning to JSH due to batch delivery, and there are 150 such suits at PerfectClean waiting to be sent back.
5. The time to ship suits to/from RapidClean can be assumed to be negligible (zero). It takes 0.5 days to ship suits to/from PerfectClean after batching. There is no shipping cost to/from RapidClean and PerfectClean.
QUESTION:
If JSH wants to reduce the number of inspection workers, what is the minimum number of workers required to ensure the capacity is sufficient?
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