Agan Interior Design provides home and office decorating assistance to its customers. In normal operation, an average of 2.8 customers arrive each hour. One design consultant is available to answer customer questions and make product recommendations. The consultant averages 8 minutes with each customer. Agan’s management would like to evaluate two alternatives:
Use one consultant with an average service time of 8 minutes per customer.
Expand to two consultants, each of whom has an average service time of 10 minutes per customer.
If the consultants are paid $15 per hour and the customer waiting time is valued at $28 per hour for waiting time prior to service, should Agan expand to the two-consultant system?
Explain. If required, round your answers to two decimal places.
The total cost for the first scenario where thre is one consultant with an average service time of 8 minutes per customer is $ ______.
The total cost for the second scenario where thre are two consultants with an average service time of 10 minutes per customer is $ _______.