Studying for a Strategic Management course.

This question was on a past

exam, to which I don't have the solutions, and I need some help badly! Even
if it's just pointers and formulas, but I'd like to have some numbers to
compare my own calculations to, too :)

"Tom Opim answers the phones at a local computer store. Currently, the
computer department receives an average of one call every 3 minutes, with a
standard deviation in this interarrival time of 3 minutes.

Tom requires an average of 2 minutes to handle a call. The standard deviation

in this processing time is 1 minute.

The telephone company charges $5.00 per hour for the telephone lines
whenever they are in use (either while a customer is in conversation with Tom
or while waiting to be helped).

Assume that there are no limits on the number of customers that can be on
hold and that customers do not hang up even if forced to wait a long time.

a) For one of his courses, Tom has to read a book. He can read 1 page per
minute. Tom can use his idle time for studying, as long as he drops the book
as soon as a call comes in. How many pages can Tom read during an 8-hour
shift (w/ no breaks)?

b) How long does a customer have to wait, on average, before talking to Tom?

c) What is the average total cost of telephone lines over an 8-hour shift?
NOTE: dept. store is billed whenever a line is in use, including when a line is
used to put customers on hold."

Best AnswerAsker's Choice

Michael answered 6 months ago

Define:
Y_i = the i-th interarrival time.
X_i = the i-th call time.

Given:
E[Y] = 3, Var(Y) = 3^2.

While we cannot infer the distribution of Y from only the first two moments,
these moments are consistent with that of an exponential random variable.
Further, nothing is said about whether interarrival times are independent.
However, the problem likely wants you to model the system as an M/G/1
queue. So let's assume the following (these assumptions are necessary to get
numbers in part (b), but are not given in the problem):

Assume (to allow calculations):

1) Arrivals are Poisson with rate lambda = 1/E[Y] = 1/3.
2) Each call time X_i is independent of arrivals and other call times.
3) 8 hours = 480 minutes is "very large" so that averages over this time are
close to their ergodic values.

Then:
E[X] = average service time = 2.
Var(X) = 1.
E[X^2] = Var(X) + E[X]^2 = 5.

a) By Little's theorem:
rho = Fraction of time busy = lamdba*E[X] = 2/3.
Fraction of time idle = 1/3.

So roughly speaking, Tom has (480)/3 minutes of idle time in 8 hours.

b) By the M/G/1 queue formula:

E[waiting before service] = lambda*E[X^2]/(2(1-rho)) = 2.5 minutes.
E[total delay] = E[waiting before service] + E[X] = 4.5 minutes.

c) By Little's theorem:
E[number in system, including in service]
= lambda*E[total delay] = 1.5 people.

Notice that this average number of people includes the possibility of having
zero people sometimes, which it should. So roughly speaking, in 8 hours the
average total cost is:
(1.5 people)*($5/(person-hour))*(1 hour/60 minutes)*(480 minutes) = $60.

***
Note that use of Little's theorem in (a) and (c) does not require the Poisson
assumption. However, calculation of average delay in part (b) uses the M/G/1
formula, which requires Poisson arrivals.