The owner of the Golden Muffler Shop estimates that the cost of customer waiting time, in terms of customer dissatisfaction and lost goodwill, is $10 per hour of time spent waiting in line.
The average car has a 2/3-hour wait (Wq). There are approximately 16 cars serviced per day (2 arrivals per hour times 8 working hours per day).
The only other major cost that Golden's owner can identify in the queuing situation is the salary of Jones, the mechanic, who earns $7 per hour, or $56 per day. What is the total expected costs?