Project #28702 - Kilowatt Car Rental

 

Kilowatt Car Rental - Telephone System

Kilowatt Car Rental, Inc. is exploring whether to upgrade their existing telephone system at their central reservation center. Customer reservation calls occur randomly at an average of one call every 3.75 minutes between 4:00 PM and 5:00 PM, and an agent spends an average of three minutes with each customer. Based on prior research, the assumptions of Poisson arrivals and exponential service times are appropriate for this waiting line situation. Management at Kilowatt desires to establish an efficient reservation system to support a more service-oriented car rental business.

If Kilowatt is able to establish an efficient reservation system management believes that business would increase in the long-run. On the other hand, if the system is busy when customers call in, they will call a competing car rental company and Kilowatt will lose business. Management does not want to over staff the reservation lines with agents who are paid $20 per hour, but they agree 85% of all calls must be answered immediately to establish a reputation of having effective customer service. During the meeting, Ms. Whitehurst points out that average calls are answered and completed (service rate) by agents faster than the average time calls are received (arrival rate). Leading to the fact that one agent should be able to work the reservation line. On the other hand, Mr. Rosenbaum would like to have at least two agents working at the same time to guarantee excellent customer service. At the present time, Kilowatt’s telephone system does not allow incoming calls to enter the system (wait) while agents are busy with other customers. A salesman from the local telephone company suggested that Kilowatt purchase an answering system that allows customers to wait on the phone in the order they call the reservation line.

Assignment

As the operations manager, you are asked to analyze the available data and generate a report to help management make a decision. Evaluate two systems, one that allows callers to wait and another that does not allow customers to wait. Your report should be written in a professional manner and include the following items.

  1. A detailed analysis of the operating characteristics of Ms. Whitehurst’s request to have one agent on duty. Make a recommendation on a system with one agent answering the telephones.

  2. A detailed analysis of the operating characteristics based on Mr. Rosenbaum’s request to have two or more agents answering customer calls. Make a recommendation on the appropriate number of agents needed to achieve the company’s service goal.

  3. A detailed analysis, including the advantages and disadvantages, of implementing a new telephone system that allows customers to wait. How many waiting customers would an expanded system need to handle?

  4. Your report only addresses data collected during the hour between 4:00 PM and 5:00 PM. However, average arrival rates vary throughout the day during different periods of time. Explain how your analysis could allow for a varying staffing plan during different time periods. What information do you need to develop such a plan?

Include all of your calculations and charts as appendices in your report. If applicable, refer to them to help Kilowatt’s management understand your recommendation(s) and conclusion. 

Subject Business
Due By (Pacific Time) 04/27/2014 05:00 pm
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