Answer C only. Tim Woods, a recent GMU MBA grad and serial entrepreneur, has opened Pets-R-awesOMe, an online pet store. He and his team are experimenting with call center staffing. A. The current call center format has two lines: one for customers who want to place an order and one for customers who want to report a problem. Each line is served by one specialized customer service representative. The call center is staffed so that at any given time, there is one representative taking customer orders and one representative addressing customer problems. On average, there is a new customer who wants to place an order every two minutes, exponentially distributed. Similarly, there is a new customer needing to address a problem every two minutes, exponentially distributed. The call center staffers are fast and can on average complete one call of either type in 75 seconds, with a standard deviation of 30 seconds. Each call center staff member is paid $15 per hour. The estimated cost of a customer waiting for a representative is $20 per hour due to lost goodwill and negative word of mouth. B. One option Pets-R-awesOMe is considering for its call center is to cross-train the two staff so they can both take orders or solve problems. In this case, all customers (i.e., those wishing to place an order and those wanting to report a problem) will join a single line and will be served by the first operator available. Each staffer after cross-training will be paid $16 per hour and will serve customers at the same rate as in part a). Arrivals are not expected to change for each type of call. The opportunity cost of waiting for a representative will still be $20 per hour. Should Pets-R-awesOMe implement this system or keep the existing call center format (part a)? Justify your answer by calculating the total cost of each option. Please show your work. C. Another option is to invest in technology to augment the staffers’ capabilities in the dedicated server configuration of part a). In this case, they estimate that it will take on average 60 seconds to complete each customer call with a standard deviation of 24 seconds. Arrivals are not expected to change for each type of call. The technology is on a subscription basis, and the cost will be $10 per hour, in addition to the $15 per hour for each staff member. The opportunity cost of waiting will still be $20 per hour of waiting for a representative. Should Pets-R-awesOMe implement this system or keep the existing call center format (part a)? Justify your answer by calculating the total cost. Please show your work.
Answer C only.
Tim Woods, a recent GMU MBA grad and serial entrepreneur, has opened Pets-R-awesOMe, an online pet store. He and his team are experimenting with call center staffing.
A. The current call center format has two lines: one for customers who want to place an order and one for customers who want to report a problem. Each line is served by one specialized customer service representative. The call center is staffed so that at any given time, there is one representative taking customer orders and one representative addressing customer problems. On average, there is a new customer who wants to place an order every two minutes, exponentially distributed. Similarly, there is a new customer needing to address a problem every two minutes, exponentially distributed. The call center staffers are fast and can on average complete one call of either type in 75 seconds, with a standard deviation of 30 seconds. Each call center staff member is paid $15 per hour. The estimated cost of a customer waiting for a representative is $20 per hour due to lost goodwill and negative word of mouth.
B. One option Pets-R-awesOMe is considering for its call center is to cross-train the two staff so they can both take orders or solve problems. In this case, all customers (i.e., those wishing to place an order and those wanting to report a problem) will join a single line and will be served by the first operator available. Each staffer after cross-training will be paid $16 per hour and will serve customers at the same rate as in part a). Arrivals are not expected to change for each type of call. The opportunity cost of waiting for a representative will still be $20 per hour. Should Pets-R-awesOMe implement this system or keep the existing call center format (part a)? Justify your answer by calculating the total cost of each option. Please show your work.
C. Another option is to invest in technology to augment the staffers’ capabilities in the dedicated server configuration of part a). In this case, they estimate that it will take on average 60 seconds to complete each customer call with a standard deviation of 24 seconds. Arrivals are not expected to change for each type of call. The technology is on a subscription basis, and the cost will be $10 per hour, in addition to the $15 per hour for each staff member. The opportunity cost of waiting will still be $20 per hour of waiting for a representative. Should Pets-R-awesOMe implement this system or keep the existing call center format (part a)? Justify your answer by calculating the total cost. Please show your work.
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