Use This Information to Answer the Following Questions

question 36

Essay

Use this information to answer the following questions.
A fast food restaurant currently has 2 cashiers.Upon arrival,customers form a single line and place their food order at the next available register.Assume that customers arrive at the rate of 35 per hour.It takes an average of 3 minutes to place and process each customer's order.Assume that arrival rate follows a Poisson distribution and service time follows an exponential distribution.
-Refer to the information above.Assume that each employee earns an hourly wage of $6.50/hour.Also,assume that the cost of customer waiting time is $10/hour.What would be the impact of hiring an additional employee on customers' waiting time and total costs?

---

Definitions:

Absolute Purchasing Power Parity

A theory that suggests that in the absence of transaction costs and other barriers, the purchasing power of a currency is the same domestically as it is abroad.

Forward Exchange Rates

The exchange rates at which two parties agree to exchange currencies at a future date.

Interest Rate Parity

A financial theory stating the difference in interest rates between two countries is equal to the expected change in exchange rates between their currencies.

Forward Contract

An agreement to buy or sell an asset at a future date for a price agreed upon today, without the standardization of futures contracts.