A retailer has one CSR to take phone orders. On average, one call comes every 6 minutes and that it takes the CSR an average of 5 minutes to take an order. Interarrival and activity times are exponentially distributed (i.e., they have coefficients of variation equal to 1). The CSR is paid $25 per hour, and the telephone company charges $7 per hour for the 800 line. The company estimates that each minute a customer is kept on hold costs it $3 in customer dissatisfaction and loss of future business. If the CSR is busy, the next caller is put on hold. Assume that any number of incoming calls can be put on hold and nobody hangs up in frustration over a long wait.
Estimate the following and show equations and logic:
a. Average number of customers on line
b. Total hourly cost of service and waiting