Managing Supply Chain and Operations 1st Edition by Thomas Foster ,Scott Sampson,Cynthia Wallin,Scott Webb

Exercise 1

Tommy Hernandez had recently been assigned lo the service design team at XLG Enterprises. Tommy had been with XLG for a little over two years when the opportunity to join the service design team became available. The service design team performs a variety of roles, one of which is to analyze and recommend improvements for existing customer service operations performed at XLG.
The design team is now analyzing a new customer service process. The process would handle a variety of customer requests, including billing disputes, shipping and product delivery issues, and product returns. These activities would take place at a newly designed service facility close to the XLG headquarters. Most of XLG's customers are small to medium-sized businesses located in the same city as the proposed customer service facility. It is the hope of XLG management that the new central location for customer service will be a way to facilitate and expedite customer requests related to product billing, shipping, and returns. Customer orders would still be placed mostly over the telephone or the Internet. A sizable number of XLG customers would come to the customer service facility to pick up deliveries or to make returns. The facility would also handle customer-related issues concerning service and billing.
A stated goal of XLG management is that the facility should ensure that customers rarely have to wait more than 15 minutes before speaking to a service representative, even during the busiest of times. XLG anticipated that it would staff the new facility with two service representatives at all times. During the busiest times of the day, however, management recognizes that they might have lo increase staffing to as many as six service representatives to meet their stated objectives.
Tommy has been asked to join the team that was designing the new facility. As part of his role, he is to conduct analysis of customer waiting times. Tommy has been given information related to expected customer arrival rates during the busiest service periods throughout the day, average service times, and costs related to both resource staffing and customer waiting. Here is a summary of the information given to Tommy:

Tommy remembers studying waiting line analysis in his SCO management course. A quick review of his old notes helps him recall that the total hourly costs of providing service are comprised of two components: the cost of providing the service and the cost of having customers wait for service. He found the following equation:
Total cost = number of servers × cost per server per unit of time + expected number of customers in the system × cost per customer to wait per unit of time
Tommy realizes that management wants an analysis that would help them determine how to staff the facility throughout the day as well as an estimate related to the overall estimated cost 01 the staffing plan, including customer waiting costs.
Management is eagerly waiting for the results of his analysis, and Tommy has promised them a report early Monday.
Questions
1. Could the facility operate during the busiest period with only a single service representative?
2. If four service representatives are used during the busiest period, what are the facility's operating characteristics as they relate to waiting lines?
3. If four service representatives are employed, can the company attain its stated goal related to waiting time during the busiest period?
4. How many service representatives should be employed to meet the company's stated service goal for each time segment provided?
5. What are the total costs associated with waiting for the cases in which four, five, or six representatives are employed during the busy period?