The manager of a regional warehouse must decide on the number of loading docks t
ID: 446089 • Letter: T
Question
The manager of a regional warehouse must decide on the number of loading docks to request for a new facility in order to minimize the sum of dock costs and driver-truck costs. The manager has learned that each driver-truck combination represents a cost of $278 per day and that each dock plus loading crew represents a cost of $1,127 per day. Use Table 1 and Table 2.
a. How many docks should be requested if trucks arrive at the rate of four per day, each dock can handle five trucks per day, and both rates are Poisson? Number of dock(s)
b. An employee has proposed adding new equipment that would speed up the loading rate to 5.71 trucks per day. The equipment would cost $100 per day for each dock. Should the manager invest in the new equipment? (Round your cost amount to 2 decimal places and all other calculations to 3 decimal places. Omit the "$" sign in your response.)
I understand part A but not part B. Please show your work; I'd like to learn this. Thanks!
Explanation / Answer
Total cost in ans a = 1127 + (4 x 278) = $2239
Cost after improvement = 1127 + ((4 / (5.71 - 4)) x 278) + 100 = $1875.852
As the cost is lesser than the previous cost the manager should invest in the equipment.
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