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Pizza shop currently has two servers that take orders for customers walking into the shop (for simplicity, that no phone orders are taken).
Number of Servers (less than 10)
1.2 By applying the M/M/s model, we are assuming that:
a. Customers arrive at random according to the exponential distribution.
b. Service times are the same for each customer.
c. Customers who see a long line will not enter the shop.
1.3 To analyze the waiting line at the counter (using hours as the time unit), the arrival rate should be input as:
a. 7.5
b. 15
c. 30
1.4 To analyze the waiting line at the counter (using hours as the time unit), the service rate should be input as:
a. 6
b. 10
c. 20
1.5 With two servers, the server utilization will be:
a. 40%
b. 67%
c. 75%
2. At a cat cafe, the daily demand for cat litter, which costs $0.40/pound, is 90 pounds with CV of 15%. Each day, the proprietor orders cat litter online. The shipping time is 4 days and the fixed ordering cost is $25. The holding cost rate is estimated to be 30% annually and the target cycle service level is 91%. Demand is normally distributed.
2.1 Calculate the order up to level (OUL). Show all work.
2.2 If, instead of ordering daily, orders were placed using a fixed order quantity model, calculate the optional economic order quantity (EOQ). Show all work.
2.3 If daily ordering were compared with the optimal order quantity, how much would be saved annually if the optional EOQ were used instead of daily ordering?
