Brown Laundry Has a Variable Demand

question 86

Essay

Brown Laundry has a variable demand. The daily demand ranges from 100 to 140 customers a day with an average of 5 items. The average daily demand is 110 customers. The laundry operates 10 hours a day. Each order takes approximately 5 minutes.
Required:
a.What is the average customer waiting time, in minutes?
b.What is the cycle time for an order?
c.The manager has decided that the waiting time is too long and has increased the workday to 11 hours. What is the waiting time now? Will the customers be any happier?

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Definitions:

Collusion Model

A theoretical framework that explains how firms within a market may work together to manipulate market conditions, such as price and output, to their advantage.

Perfectly Competitive

A market structure characterized by many buyers and sellers where no single entity can influence market prices.

Predatory Pricing

A pricing strategy where a firm sets its prices below cost in the short term to drive competitors out of the market and achieve a monopoly.

Artificially Low Price

A pricing strategy where goods or services are sold at a price below their market value, often to drive competitors out of the market or gain market share.