American Vending (AV) supplies vended food to a large university. Because students often kick the machines out of anger and frustration, management has a constant repair problem. The machines break down on an average of three per hour, and the breakdowns are distributed in a Poisson manner. Downtime costs the company $25 per hour per machine, and each maintenance worker gets $16 per hour. One worker can service machines at an average rate of five per hour distributed exponentially. What is the optimal maintenance crew size for servicing the machines

Case 1—One worker:A= 3/hour Poisson, ¡x =5/hour exponential The average number of machines in the system isL = - 3. = 4 = lJr machines' ix-A 5 - 3 2 2Downtime cost is $25 X 1.5 = $37.50 per hour; repair cost is $4.00 per hour; and total cost per hour for 1worker is $37.50 + $4.00

= $41.50.Downtime (1.5 X $25) = $37.50 Labor (1 worker X $4) = 4.00

$41.50

Case 2—Two workers: K = 3, pl= 7L= r= = 0.75 machine1 p. -A 7 - 3Downtime (0.75 X $25) = S J 8.75Labor (2 workers X S4.00) = 8.00S26.75Case III—Three workers:A= 3, p= 8L= ——r = 5- ^= § = 0.60 machinepi -A 8 - 3 5Downtime (0.60 X $25) = $15.00 Labor (3 workers X $4) = 12.00 $27.00

Comparing the costs for one, two, three workers, we see that case 2 with two workers is the optimal decision.