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QUEUING THEORY
When limited facilities fail/delays to satisfy demands made upon them, problems occur which generate queues or waiting lines. Illustrations are:• Customers waiting at cash desks in a supermarket or bank• A stock of items in a warehouse awaiting storage• Letters in an ‘in’ tray waiting to be opened • Telephone calls to a switchboard waiting to be answered.In business, queues have certain ‘economic’ or ‘cost’ implications;
It may be too costly for a company to allow long queues to develop. E.g. if employees queue up at a store counter for new material supplies, the company will incur the cost of idle time and lost production due to their time spent waiting.
It will probably be costly to speed up service, and thus reduce waiting time and queue lengths because it would be necessary to employ extra service assistants, service counters or service equipment.
Customers may expect to be served within a certain length of time; otherwise they may take their custom elsewhere. Queuing problems are therefore concerned with:
• Average waiting times• The average length of queues (i.e. the average number of people in a queue or service system)• The cost of a servicing system.The management may therefore wish to provide a servicing system which either: minimize the joint costs of: a) servicing customers b) (idle) time waste by customers in the queue or balance the requirement to provide a satisfactory service time with the interests of economy i.e. to provide a reasonably quick service but at a relatively low cost.
Limitation of break even charts Despite many advantages a break even chart suffers from the following limitations: 1) A break even chart is based upon a number of assumption
Characteristics of irrelevant costs
Characteristics of standard costing 1) Flow of information : in a standard costing system cost information flows in a straight forward manner as material is requisitioned and
Archie Ltd manufactures a product called Gizmo. It uses the following direct inputs: Price Quantity Cost per unit of output Direct materials $4 per gram 10 grams per unit $40 per
Ask queThe standard cost of chemical mixture ~ PQ’ is as follows: 40% of material P @ Rs. 400 per kg. 60% of material Q @ Rs. 600 per kg. A standard loss of 10% is normally anticip
briefly discuss five characteristics of relevant cost
Illustrate the General Design of Waste heat boilers The boiler system shall be made up of a fire tube type heat exchanger, a steam drum with relief valve internals, risers and
Do you think the food industry in general has equivocated on food labeling? Are all foods labeled natural in the same way? Has modern society subverted the concept of nature?
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