The lock box department at Bank 21 handles the processing of monthly loan payments to the bank, monthly and quarterly premium payments to a local insurance company, and bill payments for 85 of the bank's largest commercial customers. The payments are processed by machine operators, with one operator per machine. An operator can process one payment in 0.25 minute. Setup times are negligible in this situation. A capacity cushion of 20 percent is needed for the operation. The average monthly (not annual) volume of payments processed through the department currently is 400,000. However, it is expected to increase by 20 percent. The department operates eight hours per shift, two shifts per day, 260 days per year. How many machines (not operators) are needed to satisfy the new total processing volume? (Round up to the next whole integer.)
A) less than 7
B) 7
C) 8
D) more than 8

Question

Quizplus · Accepted Answer

The current processing time is 400,000 payments * 0.25 minutes/payment = 100,000 minutes. With a capacity cushion of 20 percent, the required processing time is 100,000 minutes * 1.20 = 120,000 minutes. The number of machines needed is 120,000 minutes / (8 hours/shift * 2 shifts/day * 260 days/year * 60 minutes/hour) = 7.96 machines. Rounding up to the next whole integer, 8 machines are needed.

The Lock Box Department at Bank 21 Handles the Processing