The company’s products are sold over the Internet or phoned in using the company’s toll-free telephone lines, but telephone orders is the main and growing sales channel. During its three years of existence the company has experienced rapid growth with the number of units produced more than doubling each year, but now faces a problem, scheduling its customer service staff and to optimize its toll free line capacity, in order to satisfy customers. The issue is that during the peak period of 7:30 am to 2:00 pm the average waiting time is over 127 seconds. Approximately 76% of all callers have to wait. Customers now have been telling the Listen-Up. com sales staff that it is next to impossible to get through to ask questions and place orders.
The customer service department has eight customer service representatives (CSR’s) and a supervisor. There are 12 incoming phone lines. The phone system automatically assigns an incoming call to an available CSR. If no CSR is available, the caller waits as the call is placed in a queue for the next available CSR on a “first-come, first-serve basis. ” Sometimes, when all 12 lines are in use (e. g. 8 having CSR’s assisting customers and 4 customers holding in queue) the caller receives a busy signal.
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Level of planning paper In 2000, the Prime co Wireless submerged, and emerged as Verizon Wireless; the need for speed was gaining momentum. Verizon Wireless Online DSL, digital subscriber's line, is the number one telecommunication industry appearing in the FORTUNE Magazine; it has listed as the most Admired Company. Hay Group Fortune Magazine. The founder of Verizon Company is Darby Checketts; he ...
Incoming calls can be classified into one of six categories: standard product order, custom order, order status check, new account creation, hearing aid supply order and information request. 1. What is the average arrival rate, ? , for incoming calls during a typical day? Average arrival rate stands for the number of customers calling in a certain time. If we assume the unit time is hour, the calculations are as follows. * Sum up the Average No. Calls (Figure 1 in Appendix) Total No. Calls=1348. 7 * Average arrival rate: ? =1348. 7? 12=112. 39 calls/Hour First, we add all the Average No. Calls together.
Second, we use this result to be divided by the working hours. In conclusion, the average arrival rate is 112. 39 calls / hour. 2. What is the average service rate, µ, for the CSR’s to handle incoming calls during a typical day? Service rate represents the number of customers CSRs can serve in unit time. If we assume the unit time is hour, the calculations are as follows. * Average service time: (0. 60 x 85 sec) + (0. 15 x 120 sec) + (0. 15? 220 sec) +(0. 05? 450 sec) +(0. 03? 125 sec) + (0. 02? 120 sec)=130. 65 sec * Average service rate: µ=(60 min? 60 sec)? 130. 65=27. 55 calls/ Hour
First, we calculate the weighted CSR Time Spent. As there are 6 call types and the frequency of each type happening differs, we will make frequency multiply CSR Time Spent to the result. Second, after we’ve got the average service time, we use the amount of working hours to be divided by the total service time. Finally, we have the average service rate. Therefore, the average service rate is 27. 55 calls/ Hour. 3. What is the standard deviation of the service rate, µ? Since the exponential distribution describes the waiting time of a specific event, the service rate is exponential distribution.
According to the formula, standard deviation is the square root of variance, and the variance can be calculated based on 1/µ2. * Variance=1/µ2=1/(0. 0363)2=758. 9 * Standard deviation= As a result, the stand deviation is 27. 55 4. Which waiting line model is most appropriate for the incoming calls? M/M/C * Multi-server Since there are 8 CSR in charging of answering questions, the number of channels is 8. * Infinite According to the case, the customer population is infinite, because the number of customers is large enough and there will be no influence on the system if the customers decline. * Exponential Distribution
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The distributions of the customer inter-arrival and inter-service time are exponential distributions. * FCFS If no CSR is available, the caller waits as the call is placed in a queue for the next available CSR on a “first-come, first-serve basis. * Single Phase Although 6 call types are mentioned in the case, there is no specific sequence for answering those questions and customers may ask only one type of question. Therefore it is single service. Formula: 5. What is the expected number of people waiting in the queue? The expected number of people waiting in the queue is Lq = 0. 0677 * * Look up the table and find the result is about 0. 59 However, we don’t think it is accurate. * We stimulate these calculations of the Queuing Models on excel, which is called Q. xls. Finally, we get a more accurate Lq. 6. What is the average number of callers in the system? The average callers in the system not only contain the customers who are on the call, but also include those customers who are waiting in the queue. So the average number of callers can be calculated by adding the expected number of people waiting in the queue and the average utilization of the employee. * = 0. 0677 + 112. 39 / 27. 55 = 4. 1472 7. What is the average total time in the system?
The average total time in the system can be divided into two aspects, the waiting time and the serving time. For the average waiting time, we should use the expected number of people waiting in the queue to be divided by the arrival rate. * The average waiting time = the expected number of people waiting in the queue/ arrival rate = 0. 0677 / 112. 39 = 0. 0006 * The average service time = 1 / service rate = 1 / 27. 55 = 0. 036298 (Have already calculated in Question 2) * The average total time = the average waiting time + the average service time = 0. 0006 + 0. 036298 = 0. 0369 Therefore, the average total time is 0. 0369 8.
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Given your answers to numbers 4, 5 and 6 is there really a problem with the company’s order taking process? According to the calculation of a typical day, the average rate is 112. 39 calls /hour and the service rate is 22. 55 calls/ hour. We could see that the utilization of servers is only 50. 99% and the excepted queue length is only 0. 0677, and the probability that a customer waits is only 6. 5%. These data indicate that the system capacity is adequate. But these data it is only for the average call. Values for peak periods will be significantly higher. During the peak period (7:30 am -2:00 pm), we calculate the arrival rate as 154. 4 and the service keeps the same. Then the utilization of servers changes to 70. 03%; the expected queue length changes to 0. 6332; and the probability that a customer waits increases by 27. 1%. The same way, we also calculate the data of 11:30 am, when we get the highest arrival rate of 194. 6 calls /hour. The service rate remains the same. We can see that the utilization of servers is 88. 29% and the expected queue length is 4. 9478 and the probability that a customer waits increases by 65. 6%. Compare these three groups of data, although the answers appear to indicate that the system capacity is adequate, it is only for the average call.
Therefore, there is a problem with the company’s order -taking process. Note that the utilization changes dramatically in the peak period, which results in longer queues. If the company doesn’t try to increase the efficiency especially during the peak time, customers’ satisfaction will decrease. 9. Discuss the advantages and disadvantages of giving the CSRs a bonus for going out of their way to help the phone customers. Essentially speaking, this question is a matter of tradeoff between effectiveness and efficiency.
The striking part of it is the mutually exclusive standpoint in this specific question. Giving a bonus to the CSRs will surely encourage them to spend more time on each phone customer, and thus enhance the customers’ satisfaction level. However, the number of CRSs is fixed as eight, which may result in the higher probability of hearing a busy signal for phone customers. As a consequence, less phone customers can get through and receive the proper service. For those customers who fail to get through, their level of satisfaction will undoubtedly decline.
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What we need to do is to find a balanced point to make the majority of customers receive comparatively satisfactory services instead of giving the CSRs a bonus for going out of their way to help the phone customers blindly. We can see the trend of overall customer satisfaction level will change according to the time spent of each call, and how the time spent on each call changes in accordance to the bonus given to CSRs. 10. What should Mai Chen do? Mai’s job is to find a solution for the call center management that does not increase costs and meanwhile can be implemented quickly.
According to the Chart 1 provided in this case, there are six types of incoming calls, and each CSR is equipped with a lot of documents to take care of the customers’ phone calls. Mai may set a filter on those incoming calls based on the call categories. According to the percentage and capacity rate of each call type, Mai can divide the eight CSRs into three groups, four CSRs to deal with Standard Product Order, two CSRs to deal with Custom Order, and the rest two to deal with New Account and Hearing Aid Supply.
The information system can be revised to enable the customers to check the Information and Order Status both online and self-help indicating voice services on telephone. With this proposed allocation system, CSRs can focus on their own service fields and thus shorten the Time Spent on each phone call. As we can see from the following diagram, the original phone system of the toll-free line, it’s extremely complicated and each CSR has lots of things to take care of.
