What is the average time that customers spend in system

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Reference no: EM132222120

You are in charge of a call center for a large airline company. Using your analytical prowess, you have determined that inter-arrival time of customers is 3 minutes and the standard deviation is also 3 minutes. You currently have 5 operators at your disposal, each taking, on average, 10 minutes per call with a coefficient of variation of one. The operators are paid $20/hr. There are just one toll-free number listed for the customers to call. You have estimated that it costs the company, on average, $20 per hour per customer to occupy the phone line. This cost is incurred while the customer is being put on hold or being served.

1. What is the average time that customers spend in the system? [“in the system” means “either waiting in line (on hold) or being served (talking to an operator)]

2. What is the average number of calls in the system?

3. What is the labor cost per call (Please round your number to two decimal places)?

4. What is the phone line cost per call (Please round your number to two decimal places)?

5. You have noticed that handling customer calls should take only 5 minutes on average and your operators are actually chitchatting for an average of 5 minutes per call. You can hire a supervisor who will do away with this chitchat, but costs $40/hour. Assume the coefficient of variation for the service time is still one after hiring the supervisor. What are the costs per call after hiring the supervisor? Should you hire the supervisor?

Reference no: EM132222120

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