A company has started a phone service that uses overseas doctors to provide emer

Question

A company has started a phone service that uses overseas doctors to provide emergency medical consultations. The responding doctors are based in a country with low wages but with a highly skilled pool of physicians. Responding to each call takes on average 15 minutes. At any given moment in time, there are 4 doctors overseas on duty. Calls arrive every 5 minutes on average and standard deviation of the inter-arrival time is 5 minutes. The company receives $50 from the patients insurance company for each consultation. If one of the 4 overseas doctors is available, the firm pays $20 to the doctor and makes $30 in profit. If no doctor is available overseas, the call is rerouted to the U.S. where a local physician answers the question. A local physician is always available to take a call. In this case, the firm pays the $50 to the local physician, so theres no profit for the company.

Q. What would be the additional profit (in $) per hour if the company managed to have 10 doctors overseas on duty at any given time?

Explanation / Answer

The number of calls that can be arrived per hour is 13 from 0 to 60 minutes as call arrives every 5 minutes on an average and standard deviation of inter-arrival time is 5 minutes.

|Every call takes 15 minutes on an average.

On each call company earns a profit of $30. So on 13 call profit will 30*13 = 390 $ per hour.

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