EcoJet Inc

question 207

Essay

EcoJet Inc.has variable demand for its check-in counter services.The daily demand ranges from 3,000 to 4,000 customers, and the average check-in takes 3 minutes.The average daily demand is 3,200 customers.The airline currently has 12 staffed stations operating 16 hours a day.Required:
a.What is the average customer waiting time in minutes?
b.In an effort to reduce costs, the airline is considering adding six automatic check-in stations.Management estimates that 25% of their customers will use the automatic check-in stations.They would like the average wait time to increase up to 12 minutes to encourage customer participation.How many staffed stations should be in operation to facilitate this wait time?

---

Definitions:

Desired Rate

The target interest rate set by a company or investor for a specific investment or project.

Internal Rate

Often referred to as Internal Rate of Return (IRR), it's a metric used in financial analysis to estimate the profitability of potential investments.

Compound Interest

A method of interest computation that involves charging interest on the original loan or deposit amount as well as on any interest that has built up during past periods.

Time Value

The principle that having money in the present is more valuable than having the same sum in the future because of its ability to generate earnings.