Question

Bank Boston has a branch at Bryant College. The branch is busiest at the beginning of the college year when freshmen and transfer students open accounts. This year, freshmen arrived at the office at a rate of 40 per day (assume 8-hour days). On average, it takes the Bank Boston staff person about ten minutes to process each account application. The bank is considering having one or two tellers. Each teller is paid $12 per hour and the cost of waiting in line is assumed to be $8 per hour.

By how much will the addition of one staff reduce the waiting time?

A. .6388

B. .6762

C. .7357

D. .7983

Answer 1

Total Cost = Cw x L + Cs x s

Cw = cost of customer waiting time per time period

L = average number customers in system

Cs = cost of servers per time period

s = number of servers

If s = 1,

Total Cost = Cw x L + Cs x s = .833 hours

If s = 2,

Total Cost = Cw x L + Cs x s = .035 hours

Hence, if second teller is added to serve then the waiting time will be reduced to =  .833 hours -  .035 hours = .798 hrs