Oregon Great bank specialized in auto loans. The management of its loan department is preparing hiring plans for the next year, particularly the ideal staffing level for loan representatives (who care called loan reps). Based on past and planned future sales of loans, Oregon great forecasts the new loans arrival rate to be about 10,000 loans per quarter during the next four quarters. The loan department is determined that loans reps need to perform 4 hours of loan handling work to close a loan. The bank defines age of a loan as loan closing date – date the loan arrived at the bank. The bank promises that average loan age will be no more than 6 months (2 quarters). The bank desires to achieve a loan-closing rate that is equal to the new loans arrival rate (i.e. 10,000 loans per quarter).
Question 1: How many loan reps should the bank employ next year?
Question 2: What average level of pending loans (ie. Open loans) can the bank expect at any point during the coming year?
Question : What caseload (average number of pending loans per loan rep) will the loan rep experience?