Statewide Corporation

In: Business and Management

I. Background:

Statewide Development Corporation has built a very large apartment complex in Gainesville, Florida. As part of the student-oriented marketing strategy that has been developed, it is stated that if any problem with plumbing or air conditioning are experienced, a maintenance personnel will begin working on the problem within one hour. If a tenant must wait must more than one (1) hour for the repair person to arrive, a $10 deduction from the monthly rent will be made for each additional hour of time waiting. An answering machine will take the calls and record the time of the call if the maintenance person is busy. Past experiences at other complexes has shown that during the week when most occupants are at school, there is little difficulty in meeting the one hour guarantee. However, it is observed that weekends have been particularly troublesome during the summer months. (Quantitative Analysis for Management, Render 2011, 11th Ed.)

II. Problem:

The Statewide Development Corporation’s management would like to determine two (2) maintenance people should be working on weekends instead of just one. The area to be addressed in the problem cited is company’s efficiency of providing fast and reliable repair services.

The discussion questions cited in the case are as follows:
1. Use simulation to help you analyze this problem. State any assumptions that you are making about this situation to help clarify the problem.
2. On a typical weekend day, how many tenants would have to wait more than an hour, and how much money would the company have to credit these tenants?

III. Case facts and information:

a) A $10 deduction from the monthly rent will be given if the tenant waits for more than an hour for the repair person to arrive.

b) Table below shows the probability distribution of the number of calls received on weekends...

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