A typist at an office of a company receives on the average 20 letters per day fo

Question

A typist at an office of a company receives on the average 20 letters per day for typing. The typist works 8 hours a day and it takes on the average 20 minutes to type a letter. The cost of a letter waiting to be mailed (opportunity cost) is 75 cents per hour and the cost of the equipment plus salary of the typist is $45 per day.

a) What is the typist's utilization rate?

b) What is the average number of letters waiting to be typed?

c) What is average waiting time needed to have a letter typed?

d) What is the total daily cost of waiting letters to be mailed?

Explanation / Answer

Service rate = (60/20)*8=24 letters per day

Arrival rate = 20 letter per day

Utilisation rate = Arrival rate/Service rate = 20/24 = 0.83

average number of letters waiting to be typed = 20*20/(24*(24-20)) = 4.17

average waiting time needed to have a letter typed = 1/(24-20)=1/4 hour = 15 min

Total daily cost of waiting letter to be mailed = Expected number of letter * opportunity cost + Salary

=20/(24-20)*.75*8 + 45

=$75

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.