Answer to Question #65618 in Statistics and Probability for CKW

Question

A warehouse has only one loading dock manned by a three person crew. Trucks arrive at the loading dock at an average rate of 5 trucks per hour and the arrival rate is Poisson distributed. The loading of a truck takes 10 minutes on an average and can be assumed to be exponentially distributed. The operating cost of a truck is Rs.20 per hour and the members of the loading crew are paid Rs.8 each per hour. Would you like to advise the truck owner to add another crew of 3 persons?

Answer 1

If the operating cost of a truck is Rs.20 per hour and the members of the loading crew are paid Rs.8 each per hour, then the total cost (present crew) is TC = Rs 58 per hour. Total cost (proposed crew) is TC = Rs 46 per hour, so we would like to advise the truck owner to add another crew of 3 persons.