1.    McM Cog is a supplier of industrial parts.  Most orders are received at a call center. The call center currently has 10 phone lines total, i.e., a maximum of 10 callers may be in the call center system at any time.  On average, calls arrive at a rate of three per minute. Each customer service representative (CSR) averages 2.5 minutes per customer call.  Mc Cog estimates there is a cost of two dollars per customer for each minute spent waiting by a caller.  Assume that callers getting a busy signal take their business elsewhere resulting in a loss to McM of $155 per lost call.  CSRs are paid $15 per hour, and it costs McM Cog $4 per hour per line.

a.    What is the total hourly cost of the call center and associated activities at McM Cog with the minimum number of CSRs?

b.    What is the total hourly cost to McM Cog if they decide to hire another CSR?  What is the total hourly cost to McM Cog if they decide to add another line?  Note:  Perform each of these two system adjustments separately based off the answer to part a.  Of the three options investigated so far, which is best?


c.    Given the freedom (and cost) of adding or removing additional telephone lines and CSRs what the best recommendation for McM Cog management in terms of total hourly cost?  Justify your answer.
2.    Kevin Murtuagh, manager of an national reservation service for a nationwide chain of luxury hotels, is concerned about productivity of his operation.  Analysis of recent historical data shows the call center seems to be averaging about five minutes to process a regular reservation call with a per call standard deviation of forty seconds. 

a.    Suppose that every day Kevin randomly samples 25 calls for their length in minutes and computes the average.  Draw the x-bar process control chart with 3-sigma control limits.  On three consecutive days Kevin observes averages of 4.72, 5.20 and 5.03 minutes respectively.  Should he be concerned?  Explain.

b.    Senior management has determined that call processing time should between 4 minutes, 15 seconds and 4 minutes, 45 seconds.  What is the probability that the current performance meets this standard? 

c.    Given the information from senior management in part b, what is the current process capability?

d.    Given your answer to part c, what should Kevin Murtaugh do in order to ensure that the process is 6-sigma qualified?  Explain.

3.    Consider an MBA program as a processing network where the flow unit consists of a student in the program.  Suppose the organizations that hire and promote MBAs are considered to be the “customers” of the MBA program.  For parts a-c, think of yourself as a manager, e.g., a dean, of the the MBA program.
a.    What does process synchronization mean for the MBA program internally?  Externally, between the program as whole and what comes before and after?  Explain.

b. What are important three sources of waste in this context?  Provide three examples that would qualify the MBA program as lean.

c. Given your answers to parts a-c (and your experience in the program), provide three recommendations would you make to management (i.e., the Dean,) for improvement assuming that the goal was to achieve a lean operation.