Consider a large distribution centre (DC) that sees the arrival of, on average,

Question

Consider a large distribution centre (DC) that sees the arrival of, on average, 40 trucks per 8-hour workday (assume a Poisson distribution). The unloading of a truck at one of the unloading docks takes, on average 45 minutes (assume exponential distribution). The docks operate for 8 hours per day. If a dock is not available, trucks wait in a common line for the next available dock. The truckers charge the DC $25 per hour (or portion thereof for waiting (not including unloading). The cost to operate a dock is $40 per hour (assume this to be a fixed cost that does not depend on utilization of the dock). Determine the total average cost (dock costs plus truck waiting costs) per hour if five docks are operated. a. between $200 and $225 per hour b. between $225 and $250 per hour c. between $250 and $275 per hour d. between $275 and $300 per hour e. More than $300 per hour

Explanation / Answer

The cost to operate a dock per hour = $40

The cost to operate 5 docks = $40 * 5

= $200

The waiting time charge is $25 and average time for unloading a dock = 45 minutes

Therefore the cost per hour:

b. between $225 and $250 per hour

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.