Reference no: EM131057916

Question 6

After one year since switching over-Co kiosks, Foit Air is re-evaluating its decision to go that route. The benefits of using kiosks are twofold. First, the average service time for checking in a customer is only 1.92 minutes when using a kiosk. When _using an-agent, this service time takes more than 50% longer, specifically 63 minutest Second, when comparing the total operating costs associated with using a kiosk instead of an agent, Foit Air estimates that it saves $50 per hour worth of labor costs for each kiosk in service. Unfortunately, as any frequent traveler knows, there is a dark side to kiosks: the machines can't seem to stay in service! Foit Air estimates that even though it has 12 kiosks, on average, only 8 of them are in service at any moment in time. As a result, during congested times, the waiting times have been much worse with the kiosks. Foit Air estimates that the cost of each passenger hour of waiting amounts to $30 when considering lost customer goodwill, administrative costs associated with missed flights and rescheduling, hotel vouchers and more.

As an operations management analyst, you've been asked to examine the typical arrival pattern over one-half of a day and determine whether or not Foit Air should continue with its kiosk strategy. The average arrival rate of customers is provided in the following table:

do average, it takes a single kiosk L92 minutes to process one customer. Suppose that you have, on average, 8 working kiosks from 5:00am until 11:00am.

(i) What is the capacity in (customers/hr) of one kiosk?

The following questions are associated with Question #6. The exam ended with (xvii). Questions xv and xvi build from the answers to (I - xiv). Question xvii from the mid-term exam is provided again for you to solve.

(xv) What is the total amount of Foit Air's savings on labor costs by using the kiosks (over the half-day)? Recall that, on average, only 8 are in service.

(xvi)  Suppose that before the kiosks. the waiting wasp t as extreme as we have just seen in our computations In fact. suppose that the total cost of customer waiting was only 53750 over the half-day before the kiosks were introduced. Should Foit Air have Implemented the kiosk system?

(xvii) [Extra Credit] Assuming that, as stated in the problem statement, each agent could process one customer in 3 minutes under the old system without kiosks, how many agents must have been servicing customers given that the total cost of customer waiting was only $3750?