Reference no: EM13583486

Your company has been trying to survive during this downturn in the economy. You are the manager of a call center that provides customer service to customers who have purchased an alarm system from your company. The customer service representatives answer basic questions from customers related to the use of the alarm system and some billing issues. Your department has nothing to do with sales, installation, or monitoring of the alarm system. You currently have 10 customer service representatives on staff. Your budget lines for these 10 sales representatives look as follows for the coming year:

• Salaries $ 600,000
• Commissions $ 300,000
• Benefits $ 200,000
• Travel $ 100,000
• Other Direct Costs $ 50,000
• Department Overhead $ 150,000
• Total Department Costs $1,400,000

You have been asked to reduce your department budget by $100,000 next year. Assume that Salaries, Benefits, Travel and Other Direct Costs will decrease proportionally with the elimination of a customer service representative. You believe that 9 customer service representative s can cover the current customer base, but worry that as new customers are signed up, service will diminish overall. Use the decision model below and answer the questions. Feel free to rely on your current or past job experience for the context of your decision.

Clarify the decision problem.Formulate a written statement as to the problem you are trying to solve.Specify the criterion upon which the decision will be made.List the criterion for your decision. What kind of constraints do you have?Identify the alternatives.Develop two alternative approaches to solving this problem.

Develop a decision model that brings together the criterion, the constraints, and the alternatives.In general describe the decision model you would develop to show you have reached your financial goal for each alternative.