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Case Study: The Northwoods

Backpackers Company
Management Science
EMIS – 517

Prepared for
Md. Abdul Hannan Mia
Professor,
Department of MIS,
University of Dhaka.

Prepared by
Sayeda Madiha Khadija :6163225059

Submission Date
15 December 2019
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Table of Contents
1.0 Problem Statement ......................................................................................... 3
2.0 Analysis of Alternatives Based on Queuing Models ......................................... 4
3.0 Least Cost Configuration ............................................................................... 13
4.0 Summary of Key Research Findings on Call Center Operations ...................... 14
5.0 Final Recommended Configuration ............................................................... 16
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1.0 Problem Statement

The Northwoods Backpackers Company would like to figure another call center design that takes into
account a particular administration criteria to be met. With a hold up time of under .5 minutes and quick
administration for more than 70% of potential clients, there are six choices that the organization needs
to accomplish this:

✓8 Hours Per Day, 5 Days a Week: The base configuration for The Northwoods Backpackers Company

✓16 Hours Per Day, 5 Days a Week

✓8 Hours Per Day, 7 Days a Week

✓16 Hours Per Day, 7 Days a Week

✓Adding More Operators

✓Training Existing Operators

The group must figure out which of these alternatives, which can be consolidated, not just ends up
being the slightest cost design yet meets the service criteria requested by the Packers. In the wake of
doing as such, the group must research call center operations, given the academic articles, and decide a
last suggested arrangement. This does not need to be the minimum cost arrangement, but rather the
one that bodes well for the Northwoods Backpackers Company.
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2.0 Analysis of Alternatives Based on Queuing Models

The Packers are thinking about a few unique arrangements of their telephone arrange operation
keeping in mind the end goal to meet the objectives of under 0.5 minutes of sitting tight time and quick
administration for 70% of their callers on average. The facility that Northwoods Backpackers uses can
accommodate a maximum of 10 stations. In order to accomplish these goals, the Packers have changed
the number of hours per day that the center would operate, the number of days per week that the
center is open, and the number of operators in order to satisfy these goals. It should be noted that the
service rate for the models was derived by taking 60 minutes and dividing that by the time for an
operator to take a customer order which is exponentially distributed with a mean of 3.6 minutes. The
outcome is the service rate of 16.667 calls per hour. A training company Lightning Operators, Inc. offers
a training service to Northwoods Backpackers where they will reduce the average 3.6 minutes call time
to 2.5 minutes exponentially distributed. This package costs $10,000 and can be combined with any of
the existing models. The resultant service rate when utilizing this training would be 2.5 minutes divided
by 60 minutes which results in 24 calls per hour.

Model 1 - 8 Hours Per Day and 5 Days a Week:

(A) This model is known as the base configuration and is structured around utilizing 5 operators that work
8 hours a day and 5 days a week. In this configuration, no service would be provided on the weekends.
The call rate is 175 calls per hour. As depicted below, utilizing this base configuration results in the
negative probability of having a certain number of customers in the queue, along with the average
number and average time in the queue being negative as well. This solution is not feasible due to the
negative numbers and therefore this configuration should be discarded.

(B) Another option for achieving the desired service level is to add additional operator stations. The cost
of doing this for this specific configuration is $2,900/operator. Utilizing the same arrival rate of 175 calls
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per hour and a service rate of 16.667 calls per hour, but increasing the operators by one until reaching
the maximum of 10 operators still results in negative outputs, which aren’t feasible. This configuration
should also be discarded.

(C) Utilizing the training package mentioned above which now increases the service rate to 24 calls per
hour, and increasing the number of operators by one until positive outputs are reached results in the
following depicted below. With this configuration, the company utilizes 10 operators and is able to achieve
73% immediate service of their callers on average with a 0.25 minute wait time which exceeds the target
goals. The cost associated with implementing this configuration is $14,500 ($2,900/operator) for the five
additional operators needed along with the $10,000 in utilizing the training package. The resultant total
cost is $24,500.
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Model 2 - 16 Hours Per Day and 5 Days a Week:

(A) In this model the phone center would run two 8-hour shifts providing 16 hours of service per day from
8am to midnight with no service provided on the weekends. As a result of this extended daily service, the
calls would spread between the two shifts resulting in a car arrival rate of 87.5 calls per hour. There would
still be 5 operators in each shift and utilizing this configuration would cost $11,500 over the base
configuration for the six week holiday seasons. As depicted below, utilizing just five operators with an
arrival rate of 87.5 calls per hour and a service rate of 16.667 calls per hour within this configuration
results in negative outputs, which aren’t feasible. This configuration should be discarded.
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(B) Another option for achieving the desired service level is to add additional operator stations. The cost
of doing this for this specific configuration is $4,700/operator. Utilizing the same arrival rate of 87.5 calls
per hour and a service rate of 16.667 calls per hour, but increasing the operators by one until reaching a
configuration where goals are satisfied, while not going over the maximum of 10 operator’s results in 8
operators being utilized. The probability of offering immediate service to callers on average is 79% with
the average wait time in the queue reported at 0.27 minutes. However the cost of adding those three
extra operators will cost the company a total of $14,100 ($4,700/operator). Adding this cost to the
additional $11,500 for implementing this model with 16 hours per day, 5 days a week results in a total
cost of $25,600.

(C) Utilizing the training package mentioned above which now increases the service rate to 24 calls per
hour, and increasing the number of operators by one until positive outputs are reached and target goals
being met results in the following depicted below. With this configuration, the company utilizes 6
operators and is able to achieve 79% immediate service of their callers on average with a 0.22 minute
average wait time which exceeds the target goals. The cost associated with implementing this
configuration is $4,700 ($4,700/operator) for the one additional operator needed along with the $10,000 in
utilizing the training package and the $11,500 associated with the specific configuration cost. The
resultant total cost is $26,200.
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Model 3 - 8 Hours Per Day and 7 Days a Week:

(A) In this model the company would keep their call center open over the weekend with the original 8-
hour service provided during the weekdays and the weekends. The number of operators would be kept
the same at 5 and the arrival rate would now be reduced to 125 calls per hour because of the spreading
of the calls over the available service hours. The cost of implementing this configuration is an additional
$3,600 over the base configuration for the six-week holiday season. As depicted below, utilizing just five
operators with an arrival rate of 125 calls per hour and a service rate of 16.667 calls per hour within this
configuration results in negative outputs, which aren’t feasible. This configuration should be discarded.
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(B) Another option for achieving the desired service level is to add additional operator stations. The cost
of doing this for this specific configuration is $3,800/operator. Utilizing the same arrival rate of 125 calls
per hour and a service rate of 16.667 calls per hour, but increasing the operators by one until reaching a
configuration where goals are satisfied and not going over the maximum of 10 operators results in the
target goals not being met. Although the goal for having the average wait time of less than 0.5 minutes is
met with 0.44 minutes, the immediate service for 70% of callers on average is not met and is reported at
69%. Due to one of the goals not being met and having utilized the maximum number of operators at 10,
this configuration should be discarded.

(C) Utilizing the training package mentioned above which now increases the service rate to 24 calls per
hour, and increasing the number of operators by one until positive outputs and the goals are reached
results in the following depicted below. With this configuration, the company utilizes 8 operators and is
able to achieve 80% immediate service of their callers on average with a 0.18 minute average wait time
which exceeds the target goals. The cost associated with implementing this configuration is $11,400
($3,800/operator) for the three additional operators needed along with the $10,000 in utilizing the training
package and the $3,600 associated with the specific configuration cost. The resultant total cost if
$25,000.
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Model 4 - 16 Hours Per Day and 7 Days a Week:

(A) In this model the company would continue to keep their call center open over the weekend with 16-
hour service provided during the weekdays and the weekends. The number of operators would be kept
the same at 5 and the arrival rate would now be reduced to 62.5 calls per hour because of the spreading
of the calls over the available service hours. The cost of implementing this configuration is an additional
$7,300 for the holiday season over and above the $11,500 needed to go from the 1 to a 2 shift day for a
total cost of $18,800. As depicted below, utilizing just five operators for an arrival rate of 62.5 calls per
hour and a service rate of 16.667 calls per hour within this configuration results in the target goals not
being met. This configuration should be discarded.
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(B) Another option for achieving the desired service level is to add additional operator stations. The cost
of doing this for this specific configuration is $6,300/operator. Utilizing the same arrival rate of 62.5 calls
per hour and a service rate of 16.667 calls per hour, but increasing the operators by one until reaching a
configuration where goals are satisfied and not going over maximum of 10 operators results in the need
for one additional operator. The probability of offering immediate service to callers on average is 77% with
the average wait time in the queue reported at 0.36 minutes which exceeds both of the target goals.
However the cost of adding that one extra operator will cost the company a total of $6,300
($6,300/operator). Adding this to the total model cost of $18,800 results in a total cost of $25,100.
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(C) Utilizing the training package mentioned above which now increases the service rate to 24 calls per
hour, and utilizing just five operators results in the goals being reached which is depicted below. With this
configuration, the company utilizes 5 operators and is able to achieve 85% immediate service of their
callers on average with a 0.16 minute average wait time which exceeds the target goals. The cost
associated with implementing this configuration is the $10,000 in utilizing the training package and the
$18,800 associated with the specific configuration cost. The resultant total cost if $28,800.
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3.0 Least Cost Configuration

After evaluating all of the configurations that are depicted and discussed above, the least cost
configuration is depicted below. This configuration utilizes the 8 hours per day and 5 days a week base
configuration, but needs the 5 additional operators over the base to achieve the target goals of less than
0.5 minutes of waiting time on average and immediate service for 70% of their callers on average. With
this configuration, the company utilizes 10 operators and is able to achieve 73% immediate service of
their callers with a 0.25 minute wait time which exceeds the target goals. The cost associated with
implementing this configuration is $14,500 ($2,900/operator) for the five additional operators needed
along with the $10,000 in utilizing the training package. The resultant total cost is $24,500. When
compared to all the other configurations above, this is the least costly one if the company wanted to
choose a configuration based on
cost.
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4.0 Summary of Key Research Findings on Call Center Operations

This supporting research article studied go into valuable detail regarding various aspects of call centers
and their ultimate effects on customer and employee satisfaction. Both the customer and the employee
are integral components of an organization and therefore the support of each party is directly linked to the
organization’s success. The research and analysis in this article aim to uniquely address key skills and
techniques in evaluating and executing effective management practices, in order to maximize the
customer service provided through call centers today.

"Frontline employee's views on organizational factors that affect the

delivery of service quality in call centers"
Article two delves into the actual views of frontline employees and the consequential effects their views
may have on quality service. The author begins the piece by explaining the importance of call centers,
noting that they serve as the ultimate channel to deliver customer wants and needs. In order for an
organization to properly meet the needs of their customers, management must set targets, monitor
employees, and supervise customer interface. The overall purpose of the research within this article is to
determine the factors that essentially shape the organization’s service quality in call centers.

One factor is of course the organization itself and its dynamic, which includes teamwork, employee-job fit,
technology-job fit, perceived control, supervisory control systems, role conflict, and role ambiguity. The
stronger the control an organization has on its employees and their tasks, the less stress they are bound
to encounter; however, control does not have a heavy effect on service quality. The primary factor
attributing to the service quality can of course only be the employees and their efforts. Management can
only go so far in controlling employees’ actual work. Accordingly, the method of research revolved around
actual focus groups of employees actually performing their daily tasks in a call center. Instead of using
theoretical circumstances the analysis was based upon real employees performing real life functions
within the call center.

The results were based on the following theories affecting employees:

Theme 1 – Management’s emphasis on sales.

Theme 2 – Performance monitoring and feedback.

Theme 3 – Efficiency demands linked to performance as well as to time pressures related to workload,
including the bridge created between productivity demands and service quality.

Theme 4 – Structures and support processes to help service quality

Theme 5 - If employees love their job, they will deliver good service. The best fits are those people who
are polite, helpful, confident, possess sales skills, are problem solvers, and have positive attitudes.

Theme 6 – Human resource management can either help or hurt service quality because of effects on
employee’s attitude and development. Employees need opportunities to learn and observe to develop
skills.

Theme 7 – Teams. Two issues in call centers are employee isolation and access to immediate support.

Theme 8 – Service encounter stress. Emotional demands arise from job, employees having little flexibility
to deal with customers, and not able to manage own time
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Theme 9 – Management attitude

Thus the following findings were revealed:

 It is important to integrate factors such as management practices, frontline roles, employee- job
fit, and service encounter stress.
 In service quality gaps it appeared teamwork, employee-job fit, role ambiguity, role conflict,
supervisory control systems and perceived control were identified. Technology-job fit didn’t
emerge.
 In service climate studies, the emphasis on human resource management was reinforced.
 Using the service profit chain theory, internal service quality that contributes to employees’ ability
to deliver good quality service was supported.
 Conflicts between service quality and productivity as identified and tested were confirmed. The
relationship between role conflict and service quality as related to job satisfaction and burnout
was present.
 Managing customers is emotionally draining and made difficult because of the structure and the
processes that they must adhere to
 Callers need emotional resilience and therefore customer orientation is key.
 Less emphasis should be put on achieving numbers and more emphasis should be put on a
balance of sales productivity and quality measures.
 Employees stated that key performance indicators causes stress and reduces the likelihood of
them to be friendly and welcoming to customers.
 Quality assurance processes were seen positively, but with suggested improvements in the
inflexibility of the quality assurance system, employee self-assessment component possess more
detail of customer services provided, delayed feedback from quality assurance made them forget
call.
 Participants stated that only rewards were for sales and not for service.
 Employees work in isolation, manage customer interactions at all times, while being driven by
targets that are only monitored electronically.

Essentially the evidence collected during this focus group was reliable and consistent based on the fact
that employees’ authentic opinions were exposed regarding the workplace. The results found are facts
that can be tremendously accommodating to employees and management in call centers. Although the
research wound up being beneficial, the author does indicate that in the future, it may help further for
researchers to incorporate previous circumstances and effects of employees’ feelings of identity and
isolation, being surveyed electronically. The lack of social interaction within a call center minimizes group
learning and problem solving and can be ongoing issues until organizations execute the integration of
such findings revealed within this article.
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5.0 Final Recommended Configuration

The recommendation would be to execute the least cost configuration. The low cost is attractive, as well
as various different reasons make this option emerge amongst the rest.

In view of the findings delineated in the "Summary of Key Research Findings on Call Center Operations"
page, utilizing individuals locally would profit more individuals. In addition, having five additional
administrators would breed a group environment that could help confidence. Having a group environment
makes the potential for representatives to cooperate towards an objective of giving a superior client
benefit involvement. With a group of ten, working eight hours for every day, five days seven days
expands assurance and contributes to profitability. Having depleted representatives can be adverse the
advance that the Northwoods Backpackers Company has made. In addition, having a second move will
make the company acquire some of additional costs. Using the least cost option will give the company the
most obvious opportunity for progress amid the forthcoming holiday season.