Q1. Current Performance of BOP!

Team 1 :-

As can be seen from excel, below are the answers we derive

Part A: (Exhibit Q1. Part a)

Average Customer Waiting : 9 mins

Team’s Technician Utilization : 85.31 %

Part B: (Exhibit Q1. Part b)

No of technician to reduce wait time below 1 min : 11 technician (wait time – 0.46 mins)

If we can manage with slightly higher wait time, with 10 tecnicians, wait time shall be 1.12 mins.

Q2. Fact Track Implementation:-

Part A: (Exhibit Q2. Part a)

With 8 technicians, 0 fractions of customers could be fast track with avg wait time of less than 1 min.
Even with 99% at priority 2, avg wait time for fast track customers will be 1.33 mins.

Part B: (Exhibit Q2. Part b)

By increase in 1 technician, we can cover the complete range of 10% to 40% of fast track customers. For
10% fast track users, average wait time will reduce to 0.75 min & for 40% fast track users, average wait
time shall be 1.004 min only.

Impact on Standard Calls:- (Exhibit Q2. Part b)

With increase in technician, the average wait time for standard calls shall also go down. In case of 90%
standard call users, average wait time shall be 3.13 mins & for 60% standard users, average wait time
shall be 4.15 mins which is less than 9 mins which was in case of no fast track calls due to increase of
technician.

Q3. Economical Impact of Fast track proposal:-

Due to addition of 1 technician,

Increase in Cost = $ 53,000 per year (Exhibit Q3 –Q4 a & b)

No of Avg call No of No of
customer/hr time hrs/day days/year
6.85 18.2 6 261
 10% 40%
Fast track users 0.685 2.74
Revenue from fast track per hr 24.93 99.74
Revenue from fast track per day 149.60 598.42
Revenue from fast track per year(exl weekends) 39,046.64 156,186.58

Cost 53000 53000

Net Profit/(Loss) (13,953) 103,187

As can be seen in case fast track users are only 10%, then this is loss making move, however as the no of
fast track customers, increases there is profit generation from same. It will start becoming profitable
once fast track users crosses 14%

Q4. Free Service for Fast track if wait time more than 1 min:- (Exhibit Q3 –Q4 a & b)

Assuming that it wait time is normally distributed, the no of customers for whom wait time shall be
greater than 1 min shall be 0.5*fast time customers.

Assuming the same financials, the revenue shall half with same no now.

10% 40%
Fast track users with wait time less than 1 0.3425 1.37
Revenue from fast track per hr 12.47 49.87
Revenue from fast track per day 74.80 299.21
Revenue from fast track per year(exl weekends) 19,523.32 78,093.29

Cost 53000 53000

Net Profit/(Loss) (33,477) 25,093

Thus now the model shall be profitable once the % of fast track users increases above 28%.
Q5. Impact of change in Arrival rate :-

With arrival rate – 20 calls per hour (Exhibit Q5 part a)

With arrival rate of 20 calls per hour, we can serve 20% of Fast track callers within 1 min from the
existing 8 technicians. For increase in fast track callers, we shall have to increase technician.

For standard customers, avg wait time shall reduce to 4.13 mins.

With arrival rate – 25 calls per hour (Exhibit Q5 part a)

With arrival rate of 25 calls per hour, we can serve no Fast track callers within 1 min from the existing 8
technicians. For increase in fast track callers, we shall have to increase technician. In case we do not
increase technician, the avg wait time for fast track user will be 3 mins.

For standard customers, avg wait time shall increase from to 40 mins to 59 mins depending on no of fast
track users between 10% to 40%.

Should they keep same team or split :-

Keeping pooled resources together shall be a better option as the technician utility increases by
keeping same team rather than splitting into two. Also the customers are homogenous & hence pooled
resources shall be more beneficial.

Hence propose to keep single team.

Q6. Should BAT offer service contract or just pay per call service :-

Yes, BAT should offer Service Contract as this shall help them securing a fixed annual revenue from
customers at the start of the year itself. The pricing for the same though shall have to be calculated
based on avg no of calls/year by the customers to them.

They should also continue with pay per call service for customers who would like to adhoc add to the
fast track plan.

Q7. Economical return of implementing Fast Track

Yes, as calculated in Q.3 & Q.4, we shall proceed with implementing Fast Track. Apart from additional
revenue benefit, it shall also help in increasing customer satisfaction & in turn gain more wallet share
from same customers. Also the wait time for all the customers going down will help to improve the
overall experience of the customers.

The BAT Case_Group

2_AMPMO.xls