The chattanooga furniture store gets an average of 72 72 customers per shift. marilyn helms, the manager, wants to calculate whether she should hire 1 1, 2 2, 3 3, or 4 4 salespeople. she has determined that average waiting times will be 10 10 minutes with one salesperson, 6 6 minutes with two salespeople, 3 3 minutes with three salespeople, and 2 2 minutes with four salespeople. she has estimated the cost per minute that customers wait at $ 1 1. the cost per salesperson per shift (including fringe benefits) is $ 80 80.

3 Sales people

Explanation:

The calculation of total cost per shift is shown below:-

                    1st sales         2nd sales           3rd sales            4th sales

                      person             person              person               person

Average Waiting

Time               10 minutes     6 minutes        3 minutes          2 minutes

Total waiting

Cost                  $720                $432                $216                 $144

                 (72 × $1 × 10)    (72 × $1 × 6)        (72 × $1 × 3)      (72 × $1 × 2)

Add: Total labor

Cost                   80                    $160                  $240                $320

                      ($80 × 1)            ($80 × 2)            ($80 × 3)         ($80 × 4)

Total cost          $800               $592                  $456                $464

Thus, 3 servers have the lowest cost, so that the overall cost per change with 3 Sales people is chosen.

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