Question

The Quick Wash 24-hour Laundromat has 16 washing machines. A machine breaks down every 20 days (exponentially distributed). The repair service with which the Laundromat contracts takes an average of 1 day to repair a machine (exponentially distributed). A washing machine averages $5 per hour in revenue. The Laundromat is considering a new repair service that guarantees repairs in 0.50 day, but it charges $10 more per hour than the current repair service. Should the Laundromat switch to the new repair service. please put in excel format.

a) USING CURRENT REPAIR SERVICE
	W =
	LOST REVENUES =				per machine
b) USING NEW REPAIR SERVICE
	W =
	LOST REVENUES =
	SAVING IN REVENUES =
	EXTRA COST OF SERVICE =
		24x vs. 12(x+10)
	x	x + 10	24x	12(x+10)	difference
	10
	20
	5

Answer 1

Answer :

Repair service charges per hour by current service was not given in the data

So, based on current service repair charge the answer for this problem is like this

If currently service repair charge = $5, both options are same. Any one can be chosen

If currently service repair charge >$5,(24 x >12 x + 60), Laundromat should switch to the new repair service

If currently service repair charge < $5 (24 x < 12 x + 60) Laundromat should not switch to the new repair service

Explanation :

Let us assume $ x for repair washing machine current service

It takes on day = 24 hours, the 24 x dollars to repair one machine

By new service it takes 0.5 day = 12 hrs for repairing the machine

but repair price is $10 more per hour then the current repair service means charge = 10 + x

By new service for 12 hrs charge = 12(10 + x) = $12x + 120

As new service finishes in 0.5 day, remaining 0.5 days (12 hours) machine can work. A washing machine averages $5 per hour in revenue. So Revenue gain due to new service = 12 x 5 = $60

By new service charge = $12x + 120 and earning is $60

Net charge by new service in comparison to current service = $12x + $120 - $60 = $12x + $60

By current service repair charge = $24 x ..... (1)

By new service, repair charge = $12x + $60 ... (2)

But repair charge per hour by current service (x) was not given in the data

make (1) = (2) then find x = ?

24 x = 12 x + 60

12 x =60

x = $5

If currently service repair charge = $5, both options are same. Any one can be you can choose

If currently service repair charge > $5 (24 x > 12 x + 60) Laundromat should switch to the new repair service

If current service repair charge < $5 (24 x < 12 x + 60 ), Laundromat should not switch to the new repair service

Kindly Up - vote Thank You !!!!