Precise capacity design or the rate of service utilization (ρ), is application specific.
A)It could be close to 100% for a sports arena.
B)It could be as low as 0.5 for hospital emergency room.
C)As the degree of uncertainty in demand increases, higher ρ may be appropriate.
D)A, B and C are correct.
E)Only A and B are correct.

Question

Quizplus · Accepted Answer

Choice A is correct as a sports arena is typically designed to have a high utilization rate as it is expected to be close to full capacity during events.

Choice B is correct as hospitals prioritize patient care and safety, and therefore aim to maintain a lower capacity utilization rate in emergency rooms to manage unexpected surges in demand while providing quality care.

Choice C is not necessarily true as higher utilization rates can lead to longer wait times and decreased service quality, especially in uncertain demand environments.

Therefore, the best choice is E.

Precise Capacity Design or the Rate of Service Utilization (ρ)