Smails Airlines opened its doors in June 2004 as a commuter service, with its headquarters and only hub located in Birmingham. A product of airline deregulation, Smails Air joined the growing number of successful short-haul, point-to-point airlines, including Lone Star, Comair, Atlantic Southeast, Skywest, and Business Express.
Smails Air was started and managed by a former pilot, Al Czervik (who had been with the defunct Eastern Airlines). It acquired a fleet of 12 used prop-jet planes and the airport gates vacated by Delta Air Lines 2003 downsizing.
With business growing quickly, Czervik turned his attention to Smails Airs toll-free reservations system. Between midnight and 6:00am, only one telephone reservations agent had been on duty. The time between incoming calls during this period is distributed as shown in Table 1. Czervik carefully observed and timed the agent and estimated that the time taken to process passenger inquiries is distributed as shown in Table 2.
Table 1. Current Incoming Call Distribution
Time between Calls (Min) - Probability
1 minute - 0.11 (11%)
2 minutes - 0.21 (21%)
3 minutes - 0.22 (22%)
4 minutes - 0.20 (20%)
5 minutes - 0.16 (16%)
6 minutes - 0.10 (10%)
Table 2. Service Time Distribution
Time to Process Inquiries (Min) - Probability
1 minute - 0.20 (20%)
2 minutes - 0.19 (19%)
3 minutes - 0.18 (18%)
4 minutes - 0.17 (17%)
5 minutes - 0.13 (13%)
6 minutes - 0.10 (10%)
7 minutes - 0.03 (3%)
All customers calling Smails Air go on hold and are served in the order of the calls unless the reservations agent is available for immediate service. Czervik is deciding whether a second agent should be on duty to cope with customer demand. To maintain customer satisfaction, Smails Air does not want a customer on hold for more than three minutes.
What would you advise Smails Air to do? Create a simulation model to investigate the scenario. If one agent is not enough, justify that hiring a second agent is sufficient.