Agan Interior Design provides home and office decorating assistance to its custo
ID: 2746976 • Letter: A
Question
Agan Interior Design provides home and office decorating assistance to its customers. In normal operation, an average of 3.3 customers arrive each hour. One design consultant is available to answer customer questions and make product recommendations. The consultant averages 12 minutes with each customer. Agan's management would like to evaluate two alternatives: Use one consultant with an average service time of 12 minutes per customer. Expand to two consultants, each of whom has an average service time of 15 minutes per customer. If the consultants are paid $16 per hour and the customer waiting time is valued at $25 per hour for waiting time prior to service, should Agan expand to the two-consultant system? Explain. If required, round your answers to two decimal places. The total cost for the first scenario where three is one consultant with an average service time of 12 minutes per customer is $. The total cost for the second scenario where three are two consultants with an average service time of 15 minutes per customer is $.Explanation / Answer
Each hour = 3.3 customers arrive
Time spent = 12 minutes each customer
So in one hour 5 customers can be met
Consultant cost 16 per hour; waiting cost 25 per hour
If there is one consultant, then cost is:
16 for consultant
57.5 for 2.3 clients waiting
Hence, total cost = $73.50 = $74
2 consultants:
32 for 2 consultants
32.5 for 1.3 client waiting
Hence, total cost = $64.50 = $65
It would be advisable to shift to two consultant system as the cost is lower than one consultant system.