The Cove is a midsized furniture store. Sales staff are assigned standard shifts (1st shift usually takes place between the hours of 9 a.m. and 5 p.m. 2nd shift is worked between 5 p.m. and 1 a.m. 3rd shift typically takes place between the hours of 12 a.m. and 8 a.m.), and the number of customers arriving per shift averages 40, Poisson distributed. A salesperson can deal with one customer in 5 minutes on average and costs the company $100 per shift in salaries and fringe benefits. Service times closely follow an exponential distribution. The manager is reviewing the number of salespersons to schedule for each shift. The cost of customers waiting before they receive service has been estimated at $2 per minute in terms of lost sales and loss of goodwill. a. If management wants to minimize the cost of both sales staff and customer wait times, how many salespersons should be working in each shift? b. What is the cost per shift to the company if they use the number of salespersons you computed in part a)?
The Cove is a midsized furniture store. Sales staff are assigned standard shifts (1st shift usually takes place between the hours of 9 a.m. and 5 p.m. 2nd shift is worked between 5 p.m. and 1 a.m. 3rd shift typically takes place between the hours of 12 a.m. and 8 a.m.), and the number of customers arriving per shift averages 40, Poisson distributed. A salesperson can deal with one customer in 5 minutes on average and costs the company $100 per shift in salaries and
a. If management wants to minimize the cost of both sales staff and customer wait times, how many salespersons should be working in each shift?
b. What is the cost per shift to the company if they use the number of salespersons you computed in part a)?
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