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The city of Lakewood has one magistrate who performs civil marriage ceremonies. She works eight hours on regular business days. On average, couples arrive every 15 minutes to be married. The ceremony, including information processing, usually takes about 10 minutes. The city estimates that the time that people spend waiting to be married costs them $10 per hour in goodwill and prospective campaign donations. There are two ways that they are considering to reduce this waiting cost:
a. Install a computer system to do the information processing. This will speed up each ceremony by 40 %. The city already owns the hardware; it will cost $100 per day to operate the system.
b. Hire another magistrate, at the cost of $75 per day.
Which option will save more money? Back up your recommendations with an explicit cost analysis. What assumptions have you made in order to do your analysis?
Detailed answer showing step by step and the equations used.
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