Should the company rent the machine

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Reference no: EM13254324

A company has a central document-copy service. Arrivals are assumed to follow the Poisson probability distribution, with a mean rate of 15 per hour. Service times are assumed to follow the exponential distribution. With the present copying equipment, the average service time is 3 minutes. A new machine is available that will have a mean service time of 2 minutes. The average wage of the people who bring the documents to be copied is $8 an hour.

If the machine can be rented for $10 per hour more than the old machine, should the company rent the machine? Consider lost productivity time of employees as time spent waiting in queue only because the copying machine is a self serve device.

Reference no: EM13254324

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