A small mail order firm Seas Beginnings has one phone line A

A small mail order firm Seas Beginnings has one phone line. An average of 60 people per hour call in orders, and it takes an average of 1 minute to handle a call. Time between calls and time to handle calls are exponentially distributed.If the phone line is busy, Seas Beginnings can put up toc -1 people on hold. If c -1 people are on hold, a callergets a busy signal and calls a competitor (Air End). Seas Beginnings wants only 1% of all callers to get a busy signal.How many people should the company be able to put on hold?

Solution

There is only one phone line.

Average no of people calling = 60 in one hour.

!% of all callers at most can get busy signal

i.e. prob <=0.6

Prob for less than 1 person on hold = 0.2642

No of persons = 0.2642(60)

= 15.852

Or 16 persons in hour the company is able to put on hold.