Spreadsheet Modeling & Decision Analysis: A Practical Introduction To Business Analytics, Loose-leaf Version
8th Edition
ISBN: 9781337274852
Author: Ragsdale, Cliff
Publisher: South-Western College Pub
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Many of a bank’s customers use its automatic teller machine to transact business after normal banking hours. During the early evening hours in the summer months, customers arrive at a certain location at the rate of one every other minute. This can be modeled using a Poisson distribution. Each
customer spends an average of 87 seconds completing his or her transactions. Transaction time is
exponentially distributed. Determine the following:
a. The average time customers spend at the machine, including waiting in line and completing
transactions
b. The probability that a customer will not have to wait upon arriving at the automatic teller
machine
c. The average number waiting to use the machine
An average of 36 customers per hour arrives at a bank branch office (Poisson arrival)
and wait in a single line to be served by the first available teller. The average time for
each teller to service a customer is 4 minutes (exponentially distributed). Each teller
earns $160/day and the bank branch office assesses a waiting cost of $50/day that a
customer waits in the system.
How many tellers should be on duty in this bank branch office to minimize the total
cost of this waiting line system?
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Many of a bank’s customers use its automated banking machine (ABM). During the early eveninghours in the summer months, customers arrive at an ABM at the rate of one every other minute(assume Poisson). Each customer spends an average of 99 seconds completing the transaction.Transaction times are exponentially distributed. Assume that the length of the queue is not aconstraint.
Determine the average time customers spend at the machine, including waiting in line and completing transactions.
Determine the probability that a customer will not have to wait upon arrival at the ABM.
Determine the utilization of the ABM.
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The company’s services also include cost-effective ground delivery for parcels and extra-speedy same-day delivery for urgent deliveries within 1,800 cities. Over the years, FedEx has widened its delivery network to more than 220 countries. It has purchased more cargo jets and acquired specialized shipping firms, including Tiger International, Roberts Express, RPS, and TNT Express, to support global growth. For international business customers needing products, parts, or raw materials shipped across countries or continents, the company now offers time-saving services such as commercial freight forwarding and cross-border logistical support. To add the convenience of local drop-off and pickup points for U.S. consumers and small businesses, FedEx acquired the Kinko’s office services company in 2004 and later rebranded it as FedEx Office. This acquisition also added printing and copying to the menu of services offered. Then the company arranged for large U.S. retailers such as Walgreens, Albertsons, Kroger, and Safeway to accept packages for shipment and receive package delivery for customer pickup in thousands of store locations. This means people who want to send a package can head to a nearby retailer and ship where they shop, rather than making a separate trip to the FedEx location. It’s also a safe alternative for packages to be picked up by people who don’t want FedEx shipments left by the front door. Another service FedEx offers to small and mid-sized businesses, including retailers, is FedEx Fulfillment. The purpose is to expedite order fulfillment by having each business store its products in a FedEx warehouse. Then, when the business’s customers place orders, FedEx puts the products into boxes bearing the business’s own logo and ships directly to those customers. The business doesn’t need a separate warehouse or staff for fulfillment, and packages are on their way to customers more quickly because the products were in FedEx’s warehouse, ready to be packed and shipped. This service puts FedEx into direct competition with Amazon.com, which offers a similar service to merchants that sell through the online Amazon Marketplace. But it also gives businesses that don’t sell via Amazon a fast and professional fulfillment alternative. FedEx is careful to let customers know, through media and social-media announcements, when it anticipates that extreme weather or other conditions will cause delays or force it to halt pickups and deliveries. For the duration of Hurricane Irma, for example, FedEx said it would suspend deliveries in Florida. Some Florida customers who had ordered generators to be delivered via FedEx were unhappy, because they worried about being without power during and after the storm. But one FedEx employee loaded several generator orders into his car and took them to customers himself. When a customer posted a grateful compliment to FedEx on Facebook, the message generated thousands of likes, shares, and positive comments. The company also received positive comments for its donations of cash and transportation services to areas devastated by Hurricanes Irma, Harvey, and Maria. According to the American Customer Satisfaction Index (ACSI), FedEx often tops the list of U.S. shipping companies as ranked by customers surveyed. Every day, the company delivers 13 million packages—and during the busy year-end holiday season, it delivers many more. By meeting customers’ expectations for on-time deliveries, FedEx has increased annual revenues beyond $60 billion and positioned itself for continued growth in the future. How does FedEx’s money-back guarantee address customers’ concerns about heterogeneity?arrow_forwardTony’s Barbershop is run, owned, and operated by Anthony Jones, who has been cutting hairfor more than 20 years. Anthony does not take appointments, so the arrival pattern of customers is essentially random. Traditionally, the arrival rate had been about one customer every50 minutes. Two months ago, the local paper ran an article about Anthony that improved business substantially. Currently, the arrival rate is closer to one customer every 35 minutes. Haircutsrequire an average of 25 minutes, but the times vary considerably depending on customerneeds. A trim might require as little as 5 minutes, but a shampoo and styling could take as longas an hour or more. For this reason, the exponential distribution seems to provide a reasonablygood fit of the service time distribution.Anthony’s customers have always been patient, but ever since business picked up, somehave complained that the wait is too long. Anthony is considering taking his cousin Marvin intothe business to improve customer…arrow_forwardCustomers arrive at Best-Bank-in-Town’s (BBT) sole ATM location at a rate of 21 customers per hour. It is assumed that the arrival process is random. BBT recently hired an intern who estimated that the average service time is 2 minutes per customer with a standard deviation of 1.2 minutes. [Assume that the arrival rate is the same throughout the day without peak and off-peak considerations and that there is only one ATM machine at that location] 1. Calculate average waiting time for ATM user at the BBT location 2. Calculate average length of queue at the ATM location (i.e. average numbers of customers waiting for service)? 3. What is the probability that an arriving customer has no waiting time to use the ATM? 4. BBT wants to cut the average waiting time in half without necessarily adding another ATM machine. They are in discussions with their ATM software provider who has told them that their new software is very consistent with information retrieval and can greatly minimize the…arrow_forward
- Burger Dome sells hamburgers, cheeseburgers, French fries, soft drinks, and milk shakes, as well as a limited number of specialty items and dessert selections. Although Burger Dome would like to serve each customer immediately, at times more customers arrive than can be handled by the Burger Dome food service staff. Thus, customers wait in line to place and receive their orders. Suppose that Burger Dome analyzed data on customer arrivals and concluded that the arrival rate is 33 customers per hour and 1 customer processed per minute. Compare a multiple-server waiting line system with a shared queue to a multiple-server waiting line system with a dedicated queue for each server. Suppose Burger Dome establishes two servers but arranges the restaurant layout so that an arriving customer must decide which server's queue to join. Assume that this system equally splits the customer arrivals so that each server sees half of the customers. How does this system compare with the two-server…arrow_forwardA crew of mechanics at the Department of Transportation garage make minor repairs to snowplows during the winter. The snowplows break down at an average rate of 5 vehicles per day and breakdowns are distributed according to the Poisson distribution. The mechanic can service an average of 8 vehicles per day with a repair time distribution that approximates a negative exponential distribution. Assume an 8 hour day. What is the expected average number of snowplows in the garage (waiting for repair and being repaired)? 5 1.04 1.67 8arrow_forwardThe Escargot is a small French restaurant with six waiters and waitresses. The average service time at the restaurant for a table (of any size) is 85 minutes (Poisson distributed). The restaurant does not take reservations, and parties arrive for dinner (and stay and wait) every 18 minutes (negative exponential distribution). The restaurant owner is concerned that a lengthy waiting time might hurt its business in the long run. What are the current waiting time and queue length for the restaurant? Discuss the business implications of the current waiting time and any actions the restaurant owner might take.arrow_forward
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