operations management

Individual Problem Set 2

1) ABC Airlines wanted to reduce their operating cost. They hired a consultancy service to look in to various options. One of the options suggested is eliminate the manned Check-in counters and introduce electronic check-in stations. ABC Airlines wanted to do the trial in one airport to see the impact. They used the Indianapolis Airport for their study. The observation is as follows

Average 2 customers arrive per minute and it takes 4 minutes to service a customer. They installed 10 Electronic Check-in counters. They promised if the average waiting time exceeds 1 minutes they will pay $ 10 gift voucher towards the next ticket purchase.

Answer the following questions

A. What is the average customers in the queue and average waiting time when all 10 check-in counters are working?

B. What is the average customers in queue and average waiting time when only 9 check-in counters are working?

C. If one Electronic check-in counter is not working, based on the promise made by the ABC airlines how much gift vouched they have to pay in one hour.

D. The cost of Electronic check-in counter is $ 12000 and operating cost is $ 2000 per year. ABC is planning to eliminate 3 persons with annual salary of $ 50,000 each by 10 Electronic check-in counters. Will this move reduce the operating of ABC airlines at Indianapolis airport

2) ZBank is currently having teller counters to serve the need of the customers. The customers arrive at the rate of 20 customers per hour. The Teller takes in an average 2 minutes per customer.

A. What type of queuing stem they have currently

B. How many of customers wait in line and what is the average wait time

C. If the bank replaces the teller by a ATM machine which takes exactly 2 minutes every time to serve a customer What type queuing system the bank will have

D. How many customers will wait at ATM and what is the average wait time