First Bailout Savings and Loan has one window open for payments of mortgages. The window opens at 9:00 a.m. and closes at 2:00 p.m. (a customer arriving before 2:00 p.m. will be served even if the time of service ends after 2:00 p.m.). The average arrival rate is 22 per hour, while the average service time is 2.5 minutes. One clerk at a cost of $15 per hour staffs the window. Customer waiting time has been a major concern to management. An hour of customer's waiting time (prior to and during service) is valued at $3. Management is considering three alternatives to minimize total hourly cost.
A. Do nothing. Continue on with the currently existing situation.
B. Expedite the service by adding another employee to the present window. This will increase the total cost of providing service to $25 per hour, but the service time will be reduced to 2.2222 minutes.
C. Open an additional window, at an additional cost of $18 per hour. The second window will have the same service rate as the first. Each window will have a separate line and the customers will join the shortest line.