Question

GV is a small accounting firm supporting wealthy individuals in their preparation of annual income tax statements. Every December, GV sends out a short survey to their customers, asking for the information required for preparing the tax statements. Based on 50 years of experience, GV categorizes their cases into the following two groups:

• Group 1 (new customers): 20 percent of cases

• Group 2 (repeat customers): 80 percent of cases

This year, there are 50 income tax statements arriving each week. In order to prepare the income tax statement, GV has three resources. The activities are carried out by the following three persons:

• An administrative support person that processes every tax statement.

• Senior accountant (who is also the owner): who processes only tax statements for new customers

• Junior accountant: who only processes tax statements for repeat customers.

a.What is the total demand rate for the administrator? per week

b.What is the total demand rate for the senior accountant? per week

c.What is the total demand rate for the junior accountant? per week   

Answer 1

Part A) Since the administrator processes all the tax statements, and it is given 50 tax statements arriving each week, Total demand rate = 50 per week

Part B) Senior accountant processes only new statements

Now, total tax statements = 50,

percent of new customers = 20

Hence, demand rate = 50 * 0.2 = 10 per week

Part C)

Junior accountant processes only repeat statements

Now, total tax statements = 50,

percent of repeat customers = 80

Hence, demand rate = 50 * 0.8 = 40 per week