August 2000
QT211: QUANTITATIVE ANALYSIS FOR MANAGEMENT

QUESTION 2

Total Marks: 15 Marks

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Question 2

(a) Carlton Savings and Loan has one drive-in service window. The arrival of cars
occurs at a mean rate of 10 cars per hour. The mean service rate is 12 cars per
hour.
Use this information to answer the problems that follow. Work to 2 decimal
places.
(i) What is the probability that the service facility is idle? [2]
(i) [2]
(ii) What is the average number of cars in the system? [2]
(ii) [2]
(iii) What is the probability that there are at least two cars in the system? [2]
(iii) P(2 or more vehicles in system) [1]
= p**2
= (0.833**2) [1]
= 0.69 (to 2 decimal places [1]

(iv) How long, on average, would a customer have to wait before being
attended to? Give your answer in minutes. [2]
(iv)

(b) Discuss the tradeoff between the cost of increasing service capacity and the cost of keeping customers waiting. [3]
(b) Increasing the service capacity, for example by opening more counters, causes operational costs to increase. If customers are kept waiting, they may choose to go elsewhere. [2]
A balance must be reached so that the operation is profitable and
customers are satisfied. [1]

(c) If the arrival rate of a single-channel queuing system is halved, will the average
time a unit spends waiting for service halve? Justify your answer. [4]
(c) Average time a unit spends in queue waiting for service is given by

Halving the arrival rate gives a new average time a unit spends in queue
waiting for service:

As , the average time spent waiting for service does not halve. [2]