Scenario

Office Equipment, Inc. (OEI) leases automatic mailing machines to business customers in Fort Wayne, Indiana. The company built its success on a reputation of providing timely maintenance and repair service. Each OEI service contract states that a service technician will arrive at a customer’s business site within an average of 3 hours from the time that the customer notifies OEI of an equipment problem.

Currently, OEI has 10 customers with service contracts. One service technician is responsible for handling all service calls. A statistical analysis of historical service records indicates that a customer requests a service call at an average rate of one call per 50 hours of operation. If the service technician is available when a customer calls for service, it takes the technician an average of 1 hour of travel time to reach the customer’s office and an average of 1.5 hours to complete the repair service. However, if the service technician is busy with another customer when a new customer calls for service, the technician completes the current service call and any other waiting service calls before responding to the new service call. In such cases, after the technician is free from all existing service commitments, the technician takes an average of 1 hour of travel time to reach the new customer’s office and an average of 1.5 hours to complete the repair service. The cost of the service technician is $80 per hour. The downtime cost (wait time and service time) for customers is $100 per hour.

OEI is planning to expand its business. Within 1 year, OEI projects that it will have 20 customers, and within 2 years, OEI projects that it will have 30 customers. Although OEI is satisfied that one service technician can handle the 10 existing customers, management is concerned about the ability of one technician to meet the average 3-hour service call guarantee when the OEI customer base expands. In a recent planning meeting, the marketing manager made a proposal to add a second service technician when OEI reaches 20 customers and to add a third service technician when OEI reaches 30 customers. Before making a final decision, management would like an analysis of OEI service capabilities. OEI is particularly interested in meeting the average 3-hour waiting time guarantee at the lowest possible total cost.

Managerial Report

Develop a managerial report summarizing your analysis of the OEI service capabilities. Make recommendations regarding the number of technicians to be used when OEI reaches 20 and then 30 customers, and justify your response. Include a discussion of the following issues in your report:

1. What is the arrival rate for each customer?
2. What is the service rate in terms of the number of customers per hour? (Remember that the average travel time of 1 hour is counted as service time because the time that the service technician is busy handling a service call includes the travel time in addition to the time required to complete the repair.)
3. Waiting line models generally assume that the arriving customers are in the same location as the service facility. Consider how OEI is different in this regard, given that a service technician travels an average of 1 hour to reach each customer. How should the travel time and the waiting time predicted by the waiting line model be combined to determine the total customer waiting time? Explain.
4. OEI is satisfied that one service technician can handle the 10 existing customers. Use a waiting line model to determine the following information: (a) probability that no customers are in the system, (b) average number of customers in the waiting line, (c) average number of customers in the system, (d) average time a customer waits until the service technician arrives, (e) average time a customer waits until the machine is back in operation, (f) probability that a customer will have to wait more than one hour for the service technician to arrive, and (g) the total cost per hour for the service operation.
5. Do you agree with OEI management that one technician can meet the average 3-hour service call guarantee? Why or why not?
6. What is your recommendation for the number of service technicians to hire when OEI expands to 20 customers? Use the information that you developed in Question 4 (above) to justify your answer.
7. What is your recommendation for the number of service technicians to hire when OEI expands to 30 customers? Use the information that you developed in Question 4 (above) to justify your answer.
8. What are the annual savings of your recommendation in Question 6 (above) compared to the planning committee's proposal that 30 customers will require three service technicians? (Assume 250 days of operation per year.) How was this determination reached?

Office Equipment, Inc. (OEI) leases automatic mailing machines to business customers in Fort Wayne, Indiana. The company built its success on a reputation of providing timely maintenance and repair service. Each OEI service contract states that a service technician will arrive at a customer’s business site within an average of 3 hours from the time that the customer notifies OEI of an equipment problem.

Currently, OEI has 10 customers with service contracts. One service technician is responsible for handling all service calls. A statistical analysis of historical service records indicates that a customer requests a service call at an average rate of one call per 50 hours of operation. If the service technician is available when a customer calls for service, it takes the technician an average of 1 hour of travel time to reach the customer’s office and an average of 1.5 hours to complete the repair service. However, if the service technician is busy with another customer when a new customer calls for service, the technician completes the current service call and any other waiting service calls before responding to the new service call. In such cases, after the technician is free from all existing service commitments, the technician takes an average of 1 hour of travel time to reach the new customer’s office and an average of 1.5 hours to complete the repair service. The cost of the service technician is $80 per hour. The downtime cost (wait time and service time) for customers is $100 per hour.

OEI is planning to expand its business. Within 1 year, OEI projects that it will have 20 customers, and within 2 years, OEI projects that it will have 30 customers. Although OEI is satisfied that one service technician can handle the 10 existing customers, management is concerned about the ability of one technician to meet the average 3-hour service call guarantee when the OEI customer base expands. In a recent planning meeting, the marketing manager made a proposal to add a second service technician when OEI reaches 20 customers and to add a third service technician when OEI reaches 30 customers. Before making a final decision, management would like an analysis of OEI service capabilities. OEI is particularly interested in meeting the average 3-hour waiting time guarantee at the lowest possible total cost.

Managerial Report

Develop a managerial report (1,000-1,250 words) summarizing your analysis of the OEI service capabilities. Make recommendations regarding the number of technicians to be used when OEI reaches 20 and then 30 customers, and justify your response. Include a discussion of the following issues in your report:

1. What is the arrival rate for each customer?
2. What is the service rate in terms of the number of customers per hour? (Remember that the average travel time of 1 hour is counted as service time because the time that the service technician is busy handling a service call includes the travel time in addition to the time required to complete the repair.)
3. Waiting line models generally assume that the arriving customers are in the same location as the service facility. Consider how OEI is different in this regard, given that a service technician travels an average of 1 hour to reach each customer. How should the travel time and the waiting time predicted by the waiting line model be combined to determine the total customer waiting time? Explain.
4. OEI is satisfied that one service technician can handle the 10 existing customers. Use a waiting line model to determine the following information: (a) probability that no customers are in the system, (b) average number of customers in the waiting line, (c) average number of customers in the system, (d) average time a customer waits until the service technician arrives, (e) average time a customer waits until the machine is back in operation, (f) probability that a customer will have to wait more than one hour for the service technician to arrive, and (g) the total cost per hour for the service operation.
5. Do you agree with OEI management that one technician can meet the average 3-hour service call guarantee? Why or why not?
6. What is your recommendation for the number of service technicians to hire when OEI expands to 20 customers? Use the information that you developed in Question 4 (above) to justify your answer.
7. What is your recommendation for the number of service technicians to hire when OEI expands to 30 customers? Use the information that you developed in Question 4 (above) to justify your answer.
8. What are the annual savings of your recommendation in Question 6 (above) compared to the planning committee's proposal that 30 customers will require three service technicians? (Assume 250 days of operation per year.) How was this determination reached?

Scenario

Office Equipment, Inc. (OEI) leases automatic mailing machines to business customers in Fort Wayne, Indiana. The company built its success on a reputation of providing timely maintenance and repair service. Each OEI service contract states that a service technician will arrive at a customer’s business site within an average of 3 hours from the time that the customer notifies OEI of an equipment problem.

Currently, OEI has 10 customers with service contracts. One service technician is responsible for handling all service calls. A statistical analysis of historical service records indicates that a customer requests a service call at an average rate of one call per 50 hours of operation. If the service technician is available when a customer calls for service, it takes the technician an average of 1 hour of travel time to reach the customer’s office and an average of 1.5 hours to complete the repair service. However, if the service technician is busy with another customer when a new customer calls for service, the technician completes the current service call and any other waiting service calls before responding to the new service call. In such cases, after the technician is free from all existing service commitments, the technician takes an average of 1 hour of travel time to reach the new customer’s office and an average of 1.5 hours to complete the repair service. The cost of the service technician is $80 per hour. The downtime cost (wait time and service time) for customers is $100 per hour.

OEI is planning to expand its business. Within 1 year, OEI projects that it will have 20 customers, and within 2 years, OEI projects that it will have 30 customers. Although OEI is satisfied that one service technician can handle the 10 existing customers, management is concerned about the ability of one technician to meet the average 3-hour service call guarantee when the OEI customer base expands. In a recent planning meeting, the marketing manager made a proposal to add a second service technician when OEI reaches 20 customers and to add a third service technician when OEI reaches 30 customers. Before making a final decision, management would like an analysis of OEI service capabilities. OEI is particularly interested in meeting the average 3-hour waiting time guarantee at the lowest possible total cost.

Managerial Report

Develop a managerial report (1,000-1,250 words) summarizing your analysis of the OEI service capabilities. Make recommendations regarding the number of technicians to be used when OEI reaches 20 and then 30 customers, and justify your response. Include a discussion of the following issues in your report:

1. What is the arrival rate for each customer?
2. What is the service rate in terms of the number of customers per hour? (Remember that the average travel time of 1 hour is counted as service time because the time that the service technician is busy handling a service call includes the travel time in addition to the time required to complete the repair.)
3. Waiting line models generally assume that the arriving customers are in the same location as the service facility. Consider how OEI is different in this regard, given that a service technician travels an average of 1 hour to reach each customer. How should the travel time and the waiting time predicted by the waiting line model be combined to determine the total customer waiting time? Explain.
4. OEI is satisfied that one service technician can handle the 10 existing customers. Use a waiting line model to determine the following information: (a) probability that no customers are in the system, (b) average number of customers in the waiting line, (c) average number of customers in the system, (d) average time a customer waits until the service technician arrives, (e) average time a customer waits until the machine is back in operation, (f) probability that a customer will have to wait more than one hour for the service technician to arrive, and (g) the total cost per hour for the service operation.
5. Do you agree with OEI management that one technician can meet the average 3-hour service call guarantee? Why or why not?
6. What is your recommendation for the number of service technicians to hire when OEI expands to 20 customers? Use the information that you developed in Question 4 (above) to justify your answer.
7. What is your recommendation for the number of service technicians to hire when OEI expands to 30 customers? Use the information that you developed in Question 4 (above) to justify your answer.
8. What are the annual savings of your recommendation in Question 6 (above) compared to the planning committee's proposal that 30 customers will require three service technicians? (Assume 250 days of operation per year.) How was this determination reached?

Please provide a new answer old ones where incorrect.

Qantas – strategies for current and future success

The Qantas Group maintained its strong position in the Australian domestic market in 2016/17. Through a dual brand strategy encompassing both the Qantas brand and the Jetstar brand, Qantas continued to service the premium leisure and business market segments, while Jetstar provided low fares to millions of customers in the price-sensitive market. Between them, these two airlines have approximately 90 per cent of the domestic profit pool from two-thirds capacity share.

As the Australian economy continues to transition from the mining boom, Qantas redirected some of their domestic capacity to service the growing tourism markets on the east coast of Australia. Qantas Domestic maintained a clear lead as the airline of choice in the corporate travel market, and continues to grow in the small business and premium leisure markets. Their extensive network, on-time performance, and service earned record customer satisfaction levels, are their major internal strengths. Looking ahead, Qantas will berolling out free, fast, inflight Wi-Fi on all domestic A330 and 737 aircraft, which will further strengthen their hold on the domestic market.

On the international front, they have continued to build alliances with key partner airlines, including Emirates, China Eastern and American Airlines. They have also improved their cost base, increased aircraft utilisation and redesigned our network to high-growth market s, largely in Asia.

During 2016/17, Qantas obtained the first Boeing 787-9 Dreamliner to their fleet, to replace older Boeing 747 aircraft. The Dreamliner provides unprecedented flying range, substantial cost efficiency and unrivalled customer experience, offering a sustainable competitive advantage. It also allows them to use Australia’s long distance from major international tourist hubs to advantage. A prime example is the new Perth–London route using the Dreamliner. The 17-hour flight will be the first regular, non-stop passenger service to link Australia with Europe when it commences in March 2018.

Asia remains the world’s fastest growing aviation market, and is expected to be bigger than the North America and Europe markets combined by 2035. By 2030, it is estimated that two-thirds of the world’s middle class will be in the Asia-Pacific region. Qantas believes they are well placed to capitalise on this growth. More than 50 per cent of the Qantas Group’s international capacity is currently focused on Asia, with daily services into the major business hubs of Singapore, Shanghai, Beijing, Hong Kong and Tokyo.

This year, Qantas launched Sydney–Beijing (China) and Melbourne–Narita (Japan) and increased capacity to Singapore, Hong Kong, Indonesia and the Philippines to meet growing demand. Jetstar launched services to Ho Chi Minh City (Vietnam) from Melbourne and Sydney and will start services between Melbourne and the Chinese city of Zhengzhou in 2017/18.

Focusing on Greater China, they have a three-pronged strategy to take advantage of the country’s huge growth:

1. Serve the key business hubs: Hong Kong, Shanghai and Beijing (with a combined population of 53 million people).

2. Further strengthen partnerships with China Eastern and China Southern, which provide the Group with 22 destinations in China.

3. Funnel inbound Chinese tourists — who take an average 2–3 domestic flights when visiting Australia — onto the Group’s domestic network. Jetstar-branded airlines based in Asia now have 54 aircraft in the region. This growing network — which remained profitable in 2017 — gives the Qantas Group a strong presence in key markets.

Jetstar Japan, which has entered its sixth year of operation and has grown to 21 aircraft, was ranked 58^th in the top 100 most recognised brands in that country. During 2016/17, Jetstar Japan launched flights from Tokyo (Japan) to Shanghai (China). Jetstar Asia continues to evolve its network out of Singapore and Jetstar Pacific has grown to tap into the increasing travel market both in and out of Vietnam.

Qantas Loyalty continues to provide a diversified, stable earnings stream for the Group, while strengthening loyalty to the Qantas brand. Now in its 30th year, Qantas Loyalty has diversified and expanded into new areas, bringing members fresh opportunities to earn Qantas Points. This includes travel, life and health insurance (Qantas Assure) and a travel money card that has captured 17 per cent of the market in four years (Qantas Cash).

The core Frequent Flyer program grew its membership by almost 4 per cent to 11.8 million, helped by the addition of 22 new partners (including Airbnb, Jaguar Land Rover and Samsung) as well as a renewed partnership with supermarket chain Woolworths. At the same time, Qantas Loyalty is taking advantage of business opportunities in other segments to grow revenue through a pipeline of new ventures. The Qantas Business Rewards Program strengthened their presence in the small business market. Red Planet and an equity stake in Data Republic are examples of how Qantas continues to invest in big data services. Looking ahead, Qantas Loyalty will continue to innovate and diversify to achieve annual growth of 7–10 per cent through to financial year 2022.

In June 2017, the Qantas Premier credit card was launched, which offers a high rate of points earn as well as a number of travel benefits. The credit card provides our business with another revenue stream and our customers with more choice and more ways to earn points. Around 35 per cent of credit card spending in Australia currently earns Qantas points

The introduction of free, fast inflight Wi-Fi started midway through 2016/17 with a trial on a Boeing 737. A major upgrade to the Qantas App allows our customers to keep track of their Qantas Frequent Flyer benefits, with a personalised news feed providing additional offers and news features. We launched a Facebook Messenger bot called Qantas Concierge to give customers 24/7 personalised travel inspiration, along with faster responses and more relevant information. Almost 90 per cent of customers rated their Wi-Fi experience as positive, with reliability of the service at 98 per cent. The rollout will ramp up during 2017/18 with around 80 domestic aircraft equipped by the end of calendar 2018. Our intention is to extend the service to our regional and international fleets as Wi-Fi technology improves.

Question 5 ​

5a) Why does Qantas’s believe the introduction of Loyalty and Credit Cards will benefit the group and the customers? [5 marks]

(1) For all three parts, the $100,00 loan is at 6% interest.

(a) If the loan is a six month note beginning on 2/1/18 with repayment on 8/1/18, prepare the entries for 2/1/18 and 8/1/18.

(b-1) If the loan is a six month note beginning on 11/1/18 with repayment on 5/1/19, prepare the entries for 11/1/18, 12/31/18, and 5/1/19.

(b-2) With reference to (b-1), how much interest will be shown on the 2018 and 2019 income statements? Will it be interest revenue or expense?

(c-1) If the loan is a three year note beginning on 1/1/18 with repayment on 1/1/21, prepare the entries for 1/1/18, 12/31/18, 12/31/19, 12/31/20 and 1/1/21.

(c-2) With respect to (c-1), how much interest will be on the income statements in 2018, 2019, 2020, and 2021? Will it be interest revenue or expense?

(2) Calculate the due dates for a note that is made on 2/17 and has the following terms:

(a) 3 months

(b) 90 days

(c) 60 days

(d) 45 days

In this problem, assume that the distribution of differences is approximately normal. Note: For degrees of freedom d.f. not in the Student's t table, use the closest d.f. that is smaller. In some situations, this choice of d.f. may increase the P-value by a small amount and therefore produce a slightly more "conservative" answer.

Are America's top chief executive officers (CEOs) really worth all that money? One way to answer this question is to look at row B, the annual company percentage increase in revenue, versus row A, the CEO's annual percentage salary increase in that same company. Suppose a random sample of companies yielded the following data:

Do these data indicate that the population mean percentage increase in corporate revenue (row B) is different from the population mean percentage increase in CEO salary? Use a 5% level of significance. Solve the problem using the critical region method of testing. (Let d = B − A. Round your answers to three decimal places.)

Interpret your conclusion in the context of the application.

Fail to reject the null hypothesis, there is insufficient evidence to claim a difference in population mean percentage increases for corporate revenue and CEO salary.Reject the null hypothesis, there is insufficient evidence to claim a difference in population mean percentage increases for corporate revenue and CEO salary.    Reject the null hypothesis, there is sufficient evidence to claim a difference in population mean percentage increases for corporate revenue and CEO salary.Fail to reject the null hypothesis, there is sufficient evidence to claim a difference in population mean percentage increases for corporate revenue and CEO salary.

The following information is from Bluff Run Golf Courses. The company runs three courses and the July income statement for each course is as follows:

A. Calculate the operating income percentage for each of the courses. Round your percentages to one decimal place.

B.

1. Perform a vertical analysis for each course. Round your percentages to one decimal place.

2. Based on a vertical analysis of each course, which accounts would you want to investigate further?

C. Which method of analysis (using a dollar value or percentage) is most relevant and/or useful? Why?

Country ,Infant deaths/1000 ,health $ per capita ,Obesity %,Average Income,Suicides/ 100,000,Life expectancy,Universal Health Care?, % Diabetes, Leading Cause of Death, Hospital beds/ 100,000
Algeria   21.9 362   23.6   4270   3.1   75   no   7.5   Stroke   17
Argentina   11.1   605   26.5   11960   14.2   76   no   6   Heart Disease   50
Australia   3   6031   29.9   54420   11.8   83   yes   5.1   Heart Disease   38
Austria   2.9   5581   20.1   45230   16.4   82   yes   6.9   Heart Disease   76
Belgium   3.3   4884   22.1   41860   20.5   81   yes   5.1   Heart Disease   62
Brazil   14.6   947   20.1   8840   6.3   75   no   10.4   Heart Disease   22
Burkina Faso   60.9   35   5.2   640   9.2   59   no   2.2   Influenza   4
Canada   4.3   5292   30.1   43660   12.3   82   yes   7.4   Heart Disease   27
China   9.2   420   7.3   8260   10   76   no   9.8   Stroke   42
Colombia   13.6   569   20.7   6320   6.1   74   no   10   Heart Disease   15
Denmark   2.9   6463   21   56730   12.2   81   yes   7.2   Heart Disease   31
Ecuador   18.4   579   18   5820   7.5   76   no   9.2   Heart Disease   15
Ethiopia   41.4   27   3.3   660   8.4   65   no   3.4   Influenza   2
Finland   1.9   4612   22.8   44730   16.2   81   no   6   Heart Disease   49
France   3.5   4959   25.7   38950   16.9   83   yes   5.3   Lung Cancer   65
Germany   3.1   5411   22.7   43660   13.4   81   yes   7.4   Heart Disease   83
Ghana   42.8   58   10.9   1380   6.9   62   yes   2.3   Stroke   9
Greece   3.6   1743   25.1   18960   4.3   82   yes   5.2   Heart Disease   48
Guatemala   24.3   233   16.4   3790   2.5   72   no   11.1   Influenza   6
Iceland   1.6   4662   23.9   56990   13.1   83   yes   6.1   Heart Disease   32
India   37.9   75   4.7   1680   15.7   68   no   9.3   Heart Disease   7
Ireland   3   4239   27   52560   11.7   82   yes   4.4   Heart Disease   28
Israel   3.2   2910   25.8   36190   5.5   82   yes   7.5   Heart Disease   31
Italy   2.9   3258   23.7   31590   7.9   84   yes   5.1   Heart Disease   34
Japan   2   3703   3.5   38000   19.6   84   yes   5.7   Stroke   134
Kenya   36.6   78   5.9   1380   6.5   62   no   2.4   Influenza   14
Lebanon   7.3   569   30.8   7680   3.1   80   no   13   Heart Disease   29
Luxembourg   1.6   8138   24.8   76660   11.1   82   yes   4.7   Heart Disease   49
Malta   5.2   2471   28.7   24140   6   82   yes   9.9   Heart Disease   47
Mexico   11.9   677   27.6   9040   5   77   no   15.8   Diabetes   16
Myanmar   40.7   20   2.9   1190   4.3   66   no   6.8   Stroke   9
Netherlands   4.8   5694   21.9   46310   12.6   82   yes   5.5   Lung Cancer   47
New Zealand   3.3   4896   30.6   39070   11.9   82   yes   7.3   Heart Disease   28
Nicaragua   19.4   178   15.5   2050   9.5   75   no   9.2   Heart Disease   9
Norway   2.2   9522   24.8   82330   10.9   82   yes   6   Heart Disease   39
Peru   13.6   359   20.4   5950   5.8   75   no   6.9   Influenza   16
Portugal   3   2097   22.1   19850   13.6   82   yes   9.9   Stroke   34
Spain   3.6   2658   26.5   27520   8.5   83   yes   7.7   Heart Disease   30
Sweden   2.4   6808   22   54630   15.4   83   yes   4.7   Heart Disease   26
Switzerland   3.5   9674   21   81240   15.1   83   yes   6.1   Heart Disease   47
Tunisia   12.1   785   27.1   3690   5.5   75   no   9.6   Heart Disease   22
Turkey   11.6   1037   29.4   11180   8.7   75   yes   12.8   Heart Disease   27
United Arab Emirates   5.9   2405   34.5   40480   2.9   78   yes   19.3   Heart Disease   12
United Kingdom   3.5   3377   29.8   42390   8.5   82   yes   4.7   Heart Disease   28
United States   5.6   9403   35   56180   14.3   79   no   10.8   Heart Disease   29
Venezuela, RB   12.9   923   24.3   12500   3   74   no   12   Heart Disease   8

Task 7: Best Way to Measure the Center (11 points)

The center of a data set is a value that represents a “typical” data point. There are three ways to measure the center of a data set: mean, median, or mode. In a perfect data set, the mean, median, and mode would all be equal and would accurately represent the center of data set. Unfortunately, most real-world data sets are not perfect. Depending on the characteristics of the variable, we may need to choose the best way represent the center, or “typical” value. For each variable in the Global Health Summary data set, you will need to investigate and decide what measure of center (mean, median, or mode) should be used to best represent a “typical” value.   For each variable, briefly explain how you came to your conclusion.

Hint: You may want to consider the type of variable (qualitative or quantitative), shape of the distribution, and/or if there are any outliers.

The Nike annual report states that Nike is one of the largest sellers of athletic footwear in the world. Nike's footwear products are primarily designed for athletic use, but also for casual and leisure wear. Historical data indicates that the average customer buys 4.7 pairs of sports shoes per year, with a population standard deviation of 4.6. If samples of 45 customers are taken, answer the following questions.
Your answers should be accurate to 2 decimal places.
a) What is the standard error of the mean for the sample means?

b) What is the probability that the a given sample mean is between 3 and 5 pairs of shoes?

c) What is the probability that the difference between a given sample mean and the population mean is less than 0.19?

d) What is the probability a given sample mean is greater than 5 pairs?