A business center wants to lease a fax machine for customers to use. A regular fax machine leases for $18 per hour, and it takes a customer an average of 10 minutes (exponentially distributed) to complete a faxing job. An upgraded fax machine leases for $22 per hour, and it requires an average of 8 minutes to complete a faxing job. Customers arrive at the faxing machine at a rate of 4.2 per hour (Poisson distributed) and a customer’s time is valued at $10.00 per hour. Determine which fax machine the business center should lease to minimize the total cost.
Note: Do hand calculations to answer this question.
