Question

The Rhodes Furniture store gets an average of 300 customers per shift. The manager of Rhodes wants to calculate whether she should hire 1, 2, 3, or 4 salespeople. In deciding how many cashiers to keep open each Saturday, she considers two factors: customer waiting time (and the associated waiting cost) and the service costs of employing additional checkout clerks. Checkout clerks are paid an average of $8 per hour. When only one is on duty, the waiting time per customer is 10 minutes (or1/6 hour); when two clerks are on duty, the average checkout time is 6 minutes per person; 4 minutes when three clerks are working; and 3 minutes when four clerks are on duty. Rhodes management has conducted customer satisfaction surveys and has been able to estimate that the store suffers approximately $10 in lost sales and goodwill for every hour of customer time spent waiting in checkout lines. Using the information provided, determine the optimal number of clerks to have on duty each to minimize the store’s total expected cost. How many salespeople should be hired?

Answer 1

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