Reference no: EM132670955

Most of the year was "library-like" at the Textbook Department, according to Marilyn Copp, the department manager. But the two weeks after Labor Day and the second two weeks of January were quite the opposite. She explained:

• A study done this past fall shows that we can expect 10% of our early semester customers to buy one book, 20% to buy two, 25% to buy three, 30% to buy four, and 15% to buy five books. Customers who come in can ask for help at the information desk, but the shelf areas for the many schools, departments and courses are clearly marked, so most customers help themselves. Then they come to the cash registers to check out. That's where we feel the most pressure.

1. Keying into the register an inventory code number and a price for each book (Time required: 0.1 minutes per book); and

2. Bagging books and receiving payment either by

a) collecting cash and making change (Time: 0.4 min per customer),

b) waiting while the customer wrote a check, then taking down the customer's identification data (Time: 1.2 min per customer), or

c) running a credit card through the register's automatic approval device, filling out a charge slip while waiting for an approval code, getting the customer's signature, and returning the card (Time: 1.0 min per customer).

Store records indicated that about 40% of textbook customers paid cash, 40% paid by check, and 20% by credit card.

There are three demand scenarios in these two weeks:

1) Regular demand: except the first 2 days, the demand in other days of the two weeks was fairly level. Ms. Copp estimated 150 customers per hour on average were processed in this demand scenario.

2) Busy demand: during the first 2 days, the estimated average hourly customer demand was twice of the regular demand.

3) Peak demand: between noon and 4:00 PM of the first 2 days was the busiest time. This was when students came to buy books just after attending their first classes. Ms. Copp said that customer arrivals during those peak hours ran at three times of the regular demand rate. "That's when the department gets its reputation for poor service," she remarked. "Those two afternoons each semester can make or break  career with this company.

Problems:

Problem 1. Based on the current process design and task time, what was the theoretical capacity of each cash register per hour? (i.e. how many customers could each register process per hour?)

Problem 2. With four cash registers up and running, what was the utilization rate in each of the demand scenario? Are these utilizations rates sustainable?

Problem 3. In order to maintain employee job satisfaction, Ms. Copp believes that cash registers (and their human operators) should have a utilization rate of about 80%. What is the minimum number of cash registers the bookstore should have during busy demand? How many are needed during peak demand?