Operation Analytics
Columbia Pizza has one oven that can make a whole pie in about 10 minutes. Their late-night business among hungry college students is booming, and from 9 pm – 11 pm, they average 5 pie orders per hour. However, from 5 pm – 9 pm, they average only 3 pie orders per hour. Both order rates can be assumed arrive according to a Poisson distribution.
The owner of Columbia Pizza has observed over time that if people have to wait for more than 20 minutes from when they enter to when they receive their pie, they go next door to University Falafel, and Columbia Pizza loses the $20 sale.
The owner is thinking of buying a second pizza oven and register (e.g. a second channel) that he estimates would cost $75 per night to operate (assume that $75 is the total cost of ownership).
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