Examlex

Solved

Bank of Bowmanville Has Variable Demand for Its Counter Services

question 140

Essay

Bank of Bowmanville has variable demand for its counter services.The daily demand ranges from 200 to 250 customers a day and the average banking transaction takes 6 minutes.The average daily demand is 228 customers.The bank currently has 5 staff members serving the counter and operates 7 hours a day.Required:
a.What is the average customer waiting time in minutes?
b.In an effort to reduce costs, the bank is considering eliminating one of its counter services staff and having a manager fill in during two hours of the day.What would be the effect of this change on wait time? What might the customers' reaction be?


Definitions:

Differentiated Products

Products that are distinguished from others through variations in quality, features, design, branding, or customer service.

Equilibrium Price

The market price at which the quantity of goods supplied is equal to the quantity of goods demanded.

Reaction Curve

A graph that shows how one player's optimal strategy choice depends on the strategy choice of another player.

Bertrand Model

An economic model of competition among firms in which they simultaneously choose prices rather than quantities, with the assumption that consumers choose the firm with the lowest price.

Related Questions