Both candidates would have an exponential distribution for service times with X having
a mean of 1.2 minutes and Y having a mean of 1.5 minutes. Restaurant revenue per
month is given by $6,000/W where W is the expected waiting time (in minutes) of a
customer in the system.
Determine the upper bound on the difference in their monthly compensations that
would justify hiring X rather than Y.
Cindy Stewart and Misty Whitworth graduated from business school together. They
now are inventory managers for competing wholesale distributors, making use of the
scientific inventory management techniques they learned in school. Both of them are
purchasing 85-horsepower speedboat engines for their inventories from the same
manufacturer. Cindy has found that the setup cost for initiating each order is $200 and
the unit holding cost is $400.
Cindy has learned that Misty is ordering 10 engines each time. Cindy assumes that