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Using Quantitative analysis - (Answer in Word)

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Ashley's Department Store in Kansas City maintains a successful catalog sales department in which a clerk takes orders by telephone. If the clerk is occupied on one line, incoming phone calls to the catalog department are answered automatically by a recording machine and asked to wait. As soon as the clerk is free, the party that has waited the longest is transferred and answered first. Calls come in at a rate of about 12 per hour. The clerk is capable of taking an order in an average of 4 minutes. Calls tend to follow a Poisson distribution, and service times tend to be exponential. The clerk is paid $10 per hour, but because of lost goodwill and sales, Ashley's loses about $50 per hour of customer time spent waiting for the clerk to take an order.

(a) What is the average time that catalog customers must wait before their calls are transferred to the order clerk?

(b) What is the average number of callers waiting to place an order?

(c) Ashley's is considering adding a second clerk to take calls. The store would pay that person the same $10 per hour. Should it hire another clerk? Explain.

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Solution Summary

This solution uses Quantitative Analysis to determine the average time customers take to receive service; the average number of customers waiting for service; and whether the organization should hire additional staff for a particular department.