Partially completed products arrive at a workstation in amanufacturing operation at a mean rate of 40 per hour(Poisson distributed). The processing time at the workstation averages 1.2 minutes per unit (exponentially distributed). The manufacturing company estimates that each unitof in-process inventory at the workstation costs $31 perday (on the average). However, the company can add extraemployees and reduce the processing time to 0.90 minuteper unit at a cost of $52 per day. Determine whether thecompany should continue the present operation or addextra employees.
Partially completed products arrive at a workstation in amanufacturing operation at a mean rate of 40 per hour(Poisson distributed). The processing time at the workstation averages 1.2 minutes per unit (exponentially distributed). The manufacturing company estimates that each unitof in-process inventory at the workstation costs $31 perday (on the average). However, the company can add extraemployees and reduce the processing time to 0.90 minuteper unit at a cost of $52 per day. Determine whether thecompany should continue the present operation or addextra employees.
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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Partially completed products arrive at a workstation in a
manufacturing operation at a mean rate of 40 per hour
(Poisson distributed). The processing time at the workstation averages 1.2 minutes per unit (exponentially distributed). The manufacturing company estimates that each unit
of in-process inventory at the workstation costs $31 per
day (on the average). However, the company can add extra
employees and reduce the processing time to 0.90 minute
per unit at a cost of $52 per day. Determine whether the
company should continue the present operation or add
extra employees.
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