tc = wc + sc Problem 4 (Questions 26-30) A tattoo shop gets an average of 2 rate

Question

tc = wc + sc Problem 4 (Questions 26-30) A tattoo shop gets an average of 2 rate, when 2 artis wait time per customer is 15 minutes, and when there are four is $150/hour and that each artist gets paid $200 per day O customers per day. The tattoo shop operates 8 hours per day. Based on their service working, the average wait time is 0. The waiting cost rate ts are working the average wait time per customer is 1 hour, when 3 artists are working, the average 26. What is the cost of waiting per customer with two artists working? a) $200; b) $75; c) $150; d 27. What is the cost of waiting per customer with three artists working? a) $8.33; b) $6.25; c)$37.5; d) $33.33 28. What is the waiting cost per day with two artists working? 29. What is the total cost per day with three artists working? 30. What is the best alternative? ) $50 a) $1500, b) $4000; c) $1000; d) $3000 a) $125; b) $666.7; c) $750; d) $166.7 a) 2 artists; b) 3 artists; c) 4 artists

Explanation / Answer

(26)

Cost of waiting per customer = Wq x Cost per hour for a customer waiting

For two artists working, Wq = 1 hour

Cost of waiting per customer = 1-hour x $150 per hour = $150 per customer

(27)

For three artists working, Wq = 15 min = 0.25 hour

Cost of waiting per customer = 0.25 hour x $150 per hour = $37.5 per customer

(28)

For two artists working,

Cost of waiting per day = Cost of waiting per customer x customers arriving per day () = $150 x 20 = $3000 / day

(29)

For two artists working,

Cost of waiting per day = Cost of waiting per customer x customers arriving per day () = $37.5 x 20 = $750 / day

(30)

So, based on minimum totla cost, 4 artists is the best option.

Artists Wq (hr.) Cost of waiting per day Cost of artists per day Total cost (N) Wc = (Wq x 150 x ) Sc = (N x 200) Wc + Sc 2 1.000 3000 400 3400 3 0.250 750 600 1350 4 0.000 0 800 800

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