Operating budget, Operation Management

The copy center in the College of Business at State University has become an increasingly contentious item among the college administration.

Department heads have complained to the associate dean about the long lines and waiting times for secretaries at the copy center. They claim it is a waste of scarce resources for the secretaries to wait in line and just talk when they could be doing more productive work.

Associate dean Hanford Burris says the limited operating budget will not allow the purchase of new copiers.

Lauren Moore, a teacher in Operations Management, assigned students to gather information about the copy center as a class project.

The report of the students says that the copy center has two machines. When secretaries arrive for a copy job, they join a queue, formed a single queue for the first available machine. Secretaries also never left the queue.

From the data gathered by students, Professor Moore was able to determine that secretaries arrived every 8 minutes for a copy job and that arrival rate was Poisson distributed. She was also able to determine that the average time to complete a job was 12 minutes, and this is exponentially distributed.

Dr. Moore determined that a secretary's average salary is $8.50 per hour. From her academic calendar, she added up the actual days in the year when the college and departmental offices were open and found there were 247. It then occurred to her that during the summer months, the workload is much less. The summer included about 70 days.

During the summer, Dr. Moore expected that the copy center traffic would be half of what it is during the normal year. She speculated that the average time of copying job would remain the same.

Professor Moore next called a local office supply firm to check the prices of copiers. A new copier of the type in the copy center would cost $36, 000. It would also require $8, 000 per year for maintenance and would have a normal useful life of 6 years.

Posted Date: 2/21/2013 1:24:35 AM | Location : United States







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