Customers at an Amusement Park Arrive at the Rate of 10

question 87

Multiple Choice

Customers at an amusement park arrive at the rate of 10 customers per hour.The entry booth is staffed by one employee.The mean service time at the booth to provide service to each customer is 5 minutes.The arrival rate follows a Poisson distribution,and the service time at the booth follows a negative exponential distribution.It is estimated that the cost of customer waiting time associated with dissatisfied customers and loss of goodwill is $12 per hour.The employee at the service booth is paid $8 an hour.Determine the average customer waiting time cost per day in the queue.Assume total hours of operation as 10 hours per day.

• A)$599
• B)$625
• C)$500
• D)$700

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Definitions:

Coupon Rate

A yearly interest payment as a percentage of the bond's nominal value.

Yield

The income return on an investment, typically expressed as an annual percentage, including dividend payments for stocks and interest payments for bonds.

Real Rate

The rate of interest an investor expects to receive after allowing for inflation.

Term Structure

A representation of how the yield of fixed-income securities varies with different terms or maturity periods.