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Fast Food Franchise (QUEUING)

A fast food franchise is considering adding a second employee to improve their drive-thru service. With one employee, the average time a customer spends in the system is 30 minutes. With two employees, one to take orders and one to accept payment, the average time drops to 5 minutes. A cost analysis shows that operating with two employees costs $90.50 per hour, which is lower than the $251.50 cost per hour for one employee. Therefore, adding a second employee is recommended to improve customer wait times and reduce costs.

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Katrina Magno
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53 views2 pages

Fast Food Franchise (QUEUING)

A fast food franchise is considering adding a second employee to improve their drive-thru service. With one employee, the average time a customer spends in the system is 30 minutes. With two employees, one to take orders and one to accept payment, the average time drops to 5 minutes. A cost analysis shows that operating with two employees costs $90.50 per hour, which is lower than the $251.50 cost per hour for one employee. Therefore, adding a second employee is recommended to improve customer wait times and reduce costs.

Uploaded by

Katrina Magno
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Exercise 1: Queue Exercise - Fast Food Franchise

A fast-food franchise is considering operating a drive-up window food-service operation.


Assume that customer arrivals follow a Poisson probability distribution, with an arrival
rate of 18 cars per hour, and that service times follow an exponential probability
distribution which is 3 minutes per car. Management wants to know if a second
employee should be added so that one employee fills the order while the second
employee receives the money from the customer. The average service time for this
alternative is 2 minutes per car. Determine the answer by computing the following
operating characteristics:

Operating Characteristics K= 1 K=1 w/ 2nd employee

Po = 1 – (λ / μ) Po = 1 – (λ / μ)
Probability that there are no = 1 – (18/30)
= 1 – (18/20)
customer at the fast food? = 1 – 0.90 = 1 – 0.60
= 0.10 or 10% = 0.40 or 40%

Lq = λ2 / μ (μ - λ) Lq = λ2 / μ (μ - λ)
Ave. number of customers in = 182 / 20 (20 - 18) = 182 / 30 (30 -18)
the waiting line? = 324/20(2) = 324/30(12)
= 8.10 = 0.90

Ave. no. of customers in the L = Lq + (λ / μ) L = Lq + (λ / μ)


= 8.10 + (18/20) = 0.90 + (18/30)
system?
=9 = 1.50

Wq = Lq/ λ Wq = Lq/ λ
Ave. time a customer will = 8.10 / 18 = 0.90 / 18
spend waiting in line? = 0.45 = 0.05
= 0.45 x 60 minutes = 0.05 x 60 minutes
= 27 minutes = 3 minutes

Ave. time a customer will


W = Wq + 1/μ W = Wq + 1/μ
spend in the system? = 0.45 + 1/20 = 0.05 + 1/30
= 0.50 = 0.08
= 0.50 x 60 minutes = 0.08 x 60 minutes
= 30 minutes = 5 minutes

Probability that an arriving


Pw = λ / μ Pw = λ / μ
customer would wait for = 18/20 = 18/30
service? = 0.90 or 90% = 0.60 or 60%

Probability that there are 3 Pn = (λ / μ)n Po Pn = (λ / μ)n Po


cars in the system? = (18 / 20)3 10% = (18 / 20)3 10%
= 0.0729 or 7.29% = 0.0729 or 7.29%

If the goal is to have a customer spend no more than 5 minutes in the system, what
would you recommend to be made available? 1 with 2nd Employee

2. The following cost information is available for the fast-food franchise in Prob.1

• Customer waiting time is valued at $25 per hour to reflect the fact that waiting
time is costly to the fast-food business

• The cost of each employee is $6.50 per hour

• The account for equipment and space, an additional cost of $20 per hour is at-
tributable to each channel.
What is the lowest cost design for the fast-food business?

TC = (L x Cw) + (Cs x # of employee) + (Ce&s x K)


= (9 x 25) + (6.50 x 1) + (20 x 1)
= 225 + 6.50 + 20
= 251.50
TC = (L x Cw) + (Cs x # of employee) + (Ce&s x K)
= (1.50 x 25) + (6.50 x 2) + (20 x 2)
= 37.50 + 13 + 40
= 90.50 (Lowest cost design for the fast-food business)

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