Question

Run Scenario 1 using the following inputs: Inter-arrival time = 5 hours, mean length of stay = 16 hours, standard deviation of inter-arrival time = 2 hours, standard deviation of length of stay = 4 hours. Using the equation for theoretical utilization (demand / capacity), what is the theoretical utilization?

Answer 1

Answer:

80%

Explanation:

The capacity utilization rate evaluate the proportion of potential economic output that is actually realized.

To solve for theoretical utilization, we use the following formula as given below;

Theoretical Utilization = {p/(ma)}×100

Where we have our variables as,

p=16

m=4

a=5

Imputing variables into the formula we have

Theoretical utilization = {16÷(4×5)}×100

= {16/20}×100

=0.8×100

=80%