This problem illustrates balking. The Oryo Cookie IceCream Shop in Dunkirk Square has three competitors. Sincepeople don’t like to wait in long lines for ice cream, thearrival rate to the Oryo Cookie Ice Cream Shop depends onthe number of people in the shop. More specifically, whilej 4 customers are present in the Oryo shop, customersarrive at a rate of (20 5j) customers per hour. If more than4 people are in the Oryo shop, the arrival rate is zero. Foreach customer, revenues less raw material costs are 50¢.Each server is paid $3 per hour. A server can serve anaverage of 10 customers per hour. To maximize expectedprofits (revenues less raw material and labor costs), howmany servers should Oryo hire? Assume that interarrivaland service times are exponential.

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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This problem illustrates balking. The Oryo Cookie Ice
Cream Shop in Dunkirk Square has three competitors. Sincepeople don’t like to wait in long lines for ice cream, the
arrival rate to the Oryo Cookie Ice Cream Shop depends on
the number of people in the shop. More specifically, while
j 4 customers are present in the Oryo shop, customers
arrive at a rate of (20 5j) customers per hour. If more than
4 people are in the Oryo shop, the arrival rate is zero. For
each customer, revenues less raw material costs are 50¢.
Each server is paid $3 per hour. A server can serve an
average of 10 customers per hour. To maximize expected
profits (revenues less raw material and labor costs), how
many servers should Oryo hire? Assume that interarrival
and service times are exponential.

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