Question 1 (16 points)

An apparel store, “Perfect Fit”, takes three steps in serving a customer. First, each customer
spends 30 minutes browsing through the items in the shopping area. Second, each customer
spends 20 minutes in a fitting room. The store has five fitting rooms, and sharing a fitting room
is not allowed. Third, each customer spends 6 minutes with a cashier in checkout. There are two
cashiers.

Following the “social distancing” guideline of CDC, the store allows a maximum of 15 custom-
ers in its shopping area. When the shopping area reaches the maximum number of customers
(15), no more customers can enter the store. When a customer is ready to go into a fitting room
but there is no fitting room available, the customer needs to wait in a line in the shopping area.
The fitting rooms are not part of the shopping area. The checkout area is on the other end of the
fitting rooms and is not part of the shopping area either.

The store opens from 10am to 6pm every day. Customers arrive uniformly at the rate of 20 cus-
tomers per hour, and the first customer arrives at 10:03am. When the shopping area reaches the
maximum number of customers, no more customers can enter the store, and new customers will
wait patiently in a line in front of the store. Customers who arrive by 6pm will wait as long as it
takes to enter the store, and the store will stay open as long as it takes to serve all customers who
arrive by 6pm. Customers are not allowed to join the line after 6pm.

a) (5 points) Draw a process flow diagram of the operations. Indicate the capacities of all opera-
tions. Also indicate the flow rate into and out of each operation.

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b) (1 point) Which step is the bottleneck of the process?

c) (1 point) What is the utilization of the cashiers?

d) (1 point) When does the first customer leave the store?

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e) (1 point) When does the line for fitting rooms start?

f) (2 points) When does the line in front of the store start?

g) (2 points) What is the maximum number of customers waiting in front of the store?

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h) (2 points) What is the maximum waiting time in front of the store?

i) (1 point) When does the last customer leave the store?

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Question 2 (4 points)
The US Federal Reserve System (Fed) wants to maintain an average of 7.2 billion one-dollar bills
in circulation. The Fed checks the physical condition of used bills every time they are recaptured
by the banking system, and shreds any bills considered unfit for circulation. The average lifetime
of a one-dollar bill is 18 months. The US Bureau of Engraving and Printing is in charge of pro-
ducing new one-dollar bills. According to that agency’s latest report, the variable cost to manufac-
ture and distribute one-dollar bills is $23.88 per thousand.
(a) (2 points) How many new one-dollar bills must the Bureau of Engraving and Printing supply
to the Fed annually to maintain the desired circulation level?

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(b) (2 points) The US Mint is in charge of producing new one-dollar coins, which have an average
lifetime of 30 years. According to the US Mint’s latest report, the variable cost to manufacture and
distribute one-dollar coins is $129.20 per thousand. Suppose the Fed decided to replace all one-
dollar bills with one-dollar coins while maintaining the same level of circulation. What would be
the annual savings in variable costs of manufacturing and distributing? Please give your answer in
dollars.

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