A small shop typically employees one cashier. They have an average arrival rate into the at check out of 12 per hour. It takes the cashier and average of 4 minutes to service each of the customers. The cashier is paid $7 per hour. The company feels that they incur an expense of $10.00 per hour that each customer has to wait to be served. What is the total cost to the company during an 8 hour day.
The company has an option to open another cashier station at the exit on the other side of the store. These cashier stations would be unrelated and have separate lines. To operate this station they would have to hire another cashier for $7 per hour. The company would still incur the $10. per hour customer waiting cost. What is the total cost of this system for an 8 hour day.
Which system is better for the company?
Which system has better utilization of the employee/employees
What are these utilization rates?