PA 16-13 Larry Ellison starts a company that manufacturers... Larry Ellison star
ID: 325660 • Letter: P
Question
PA 16-13 Larry Ellison starts a company that manufacturers... Larry Ellison starts a company that manufacturers high-end custom leather bags. He hires 2 employees. Each employee only begins working on a bag when a customer order has been received and then she makes the bag from beginning to end. The average production time of a bag is 1.9 days with a standard deviation of 2.2 days. Larry expects to receive one customer order per day on average. The interarrival times of orders have a coefficient of variation of 1 What is the expected duration, in days, between when an order is received and when production begins on the bag? Round to nearest integer. daysExplanation / Answer
Time for Interarrival = a = 1 day
Time for production = p = 1.9 days
No of employees = m = 2
Coefficient of variation = 1 day
Standard devation for production time = 2.2 days
Utilisation = Time for production/(Time for Interarrival *No of employees) = 1.9/(1*2) = 0.95
Capacity factor = Time for production/No of employees = 1.9/2 = 0.95
Utilisation factor = Utilisation/1-Utilisation = 0.95/(1-0.95) = 19
Variability factor = (Coefficient of variation for production ^2 + Coefficient of variation for interarrival times ^2)/2
= (1.5*1.5 + 1*1)/2
= 1.63
Expected days between when an order is received and when production begins on the bag
= Capacity factor * Utilisation facto * Variability factor
= 0.95*19*1.63
= 29.42 days
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