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:

Statement of Cash Flows

A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, categorizing cash activities into operating, investing, and financing activities.

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.

Financing Activity

Transactions and events where cash is raised from creditors and investors to fund the company’s operations and expansions.

Statement of Cash Flows

A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, dividing activities into operating, investing, and financing activities.