Question

Paw Salon currently services an average of 74 pets per day. Observations in recent weeks show that its utilization is about 90 percent, allowing for just a 10 percent capacity cushion. If demand is expected to be 60 percent of the current level in five years and management wants to have a capacity cushion of just 12 percent, what capacity requirement should be planned? The needed capacity requirement is _______ customers per day. (Enter your response rounded up to the next whole number.)

Answer 1

Answer:

50 customers per day

Explanation:

For computing the capacity required customers per day, first, we have to  compute the current demand per day which is shown below:

Current demand = Average number of  pets per day × estimated percentage

= 74 pets × 60%

=  44.4 per day

Now the capacity required per day would be

= (Current demand per day) ÷ (1 -  capacity cushion percentage)

= 44.2 ÷ (1 - 0.12)

= 50.22 per day