PLEASE STOP COPYING AND PASTING THE WRONG ANSWERS! Truck drivers working for Juh

Question

PLEASE STOP COPYING AND PASTING THE WRONG ANSWERS!

Truck drivers working for Juhn and Sons are paid a salary of $30 per hour on average. Fruit loaders receive about $18 per hour. Truck drivers waiting in the queue or at the loading gate are drawing a salary but are productively idle and unable to generate revenue during that time. Juhn and Sons Wholesale Fruit Distributors employ one worker whose job is to load fruit on outgoing company trucks. Trucks arrive at the loading gate at an average of 26 per day, or 3.25 per hour, according to a Poisson distribution. The worker loads them at a rate of 4 per hour, following approximately the exponential distribution in service times. What would be the hourly cost savings to the firm associated with employing two loaders instead of one?

Explanation / Answer

Given that the wait time for a driver and a fruit loader is 1 hour, the total cost is: Cost of current state

($30 per driver per hour * 1 hour) * 3.5 trucks in the system + ($18 per fruit loader) * (1 fruit loaders)

(30)(3.5) + 18       

105 + 18 = $123

When there are two fruit loaders and the system becomes more efficient, hence:

Total Cost of current state = ($30 per driver per hour * .2 hours) * 3.5 trucks in the system + ($18 per fruit loader) * (2 fruit loaders)

($6)*3.5 + ($36)

21+36 = $57

Difference between the two is $123 - $57 = $66

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