Suppose That a Coffee Shop Wants the Average Line Length

question 79

Multiple Choice

Suppose that a coffee shop wants the average line length to be 5 customers and that 50 customers arrive each hour. The probability distributions that describe arrival and service times are unknown. How many minutes will the average customer wait in line?

• A) 6 minutes
• B) 5 minutes
• C) 10 minutes
• D) 0.1 minutes
• E) 2.5 minutes

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Definitions:

Pretax Earnings

The amount of income earned by a company before tax expenses are deducted.

Variable Cost

Variable cost refers to expenses that fluctuate with the level of output or production activity, such as raw materials and direct labor costs.

Fixed Costs

Fixed costs are expenses that do not change with the level of production or sales activity, such as rent, salaries, or insurance, remaining constant regardless of business operations.

Contribution Margin

The difference between sales revenue and variable costs, showing how much sales contribute to covering fixed costs and generating profit.