Single checkout stand with full-time cashier

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Reference no: EM131718820

A small grocery store has a single checkout stand with a full-time cashier. Customers arrive at the stand according to a Poisson process at an average rate of 30 per hour. The service time distribution is exponential, with a mean of 1.5 minutes per customer. Some customers have complained about the occasional long lines. Since no room is available for a second checkout stand, the manager is considering hiring another person to help the cashier to bag the groceries. This would reduce the mean service time to 1 minute per customer. The cost for hiring a new employee would be $12 per hour. It is estimated that the store would incur lost profit of future business in the amount of S0.25 for each minute that each customer has to wait (including service time). Based on the expected total cost, determine whether it would be worthwhile to hire a new person.

Reference no: EM131718820

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