decision analysis

CRYSTAL BALL ASSIGNMENT

ITM 501 – Simulation Report

CRYSTAL BALL ASSIGNMENT

Stephen Uthayakumaran

Kiana Arashi:

Syed Huda

Mariam El Badan

Summary

ABC is a company that offers affordable prices with

outstanding service, and that’s what unique about it. They have

always had effective customer service, especially with their help

desk. As a result the variety of clients started increasing and

caused the volume of business to increase. ABC’s clients were all

from North America and to help serve them better there shifts use

to take place for 6 hours according to an Eastern Time zone

(11pm-5 am). But now as the business volume increased they

started offering 24/7 customer service, by hiring more employee’s

to work 8-hour shift. ABC’s concerned with losing their customers

due to the expansion of the business. Therefore they ask their

employee to concentrate on one customer at a time, and give them

their full attention and ignore multi-tasking. ABC now needs to

figure out the number of employee to hire in order to minimize

the company’s cost.

Objective

The Objective of this report is to find out the number

of staff that should be hired for the help desk position, in

order to minimize cost and serve customers in the best possible

way.

Assumptions

To better understand the purpose of the report and to

give better decision-making ideas, we must examine the case and

look for all the assumptions that we have. Here are some of the

assumptions we have gathered:

ABC objective is to minimize cost.

ABC offers 24/7 services.

ABC has three shifts, and each shift will have at least onestaff member at a help desk.

ABC does not allow their help desk staff to multi-task,

therefore they will use the first come, first serve base.

Their help desk staffs are usually at the same skill andknowledge level, and their shifts are on a rotating basis.

Staff’s shifts are for the 8-hours straight.

The maximum number of staff that are working at the helpdesk at a certain shift is 2.

ABC accepts requests that are either through the phone,email or real-time (text) chat over the web.

Simulation

There were a couple of ways to simulate the conditions

required for this project. We chose to use crystal ball to factor

in all the different variations of the same randomized data by

running 500 trials (to represent the 500 weeks). Observing our

results, we conclude that the best approach towards this problem

would be to have 1 staff per shift to run the ABC Company. This

will approximately maintain the least amount of delay costs (on

average) compared to any other options available which will

improve customer service greatly. We have chosen staff to be

hired at 600 per week based on our budget. We had to test

different types of staffing formations to determine an optimal

staff count. In order to utilize all the different options, we

simulated the trials in all 8 different possible settings. The

average increase on our budget, factoring in delay costs, will be

about 331.72 dollars giving us a total expense of 2131.72 per

week. In contrast with all the other options, (1,1,1) is the

least costly and as such the best logical choice.

Results for 500 trials in all

formations

(1,1,1)

Forecast: Delay Cost (Total)Statistic Forecast valuesTrials 500Mean $331.72Median $332.62Mode '---Standard Deviation $110.31

Variance $12,167.54Skewness -0.1486Kurtosis $3.93Coeff. of Variability $0.33Minimum $9.73Maximum $710.27Mean Std. Error $4.93

(1,1,1)

Cost of StaffShift 1 Shift 2 Shift 3

# ofstaff 1 1 1Price /week $600.00 $600.00 $600.00Cost /shift(Total) $600.00 $600.00 $600.00

Staff Cost (Total) $1,800.00

Overall Costs(Total) $2,131.72

(1,1,2)

Forecast: Total Delay CostStatistic Forecast valuesTrials 500Mean $331.65Median $313.14Mode '---Standard Deviation $103.73Variance $10,760.13Skewness 1.27Kurtosis $5.92Coeff. of Variability $0.31Minimum $151.35Maximum $905.96Mean Std. Error $4.64

(1,1,2)

Staff CostsShift 1 Shift 2 Shift 3

# ofstaff 1 1 2Price /week $600.00 $600.00 $600.00Cost /shift(Total) $600.00 $600.00 $1,200.00


Overall Costs(Total)

$2,731.65

(1,2,1)

Forecast: Total Delay CostStatistic Forecast

valuesTrials 500Mean $116.97Median $111.55Mode '---Standard Deviation $35.81Variance $1,282.71Skewness $1.04Kurtosis 4.59Coeff. of Variability 0.3062Minimum $53.48Maximum $287.97Mean Std. Error $1.60

(1,2,1)

Staff CostsShift 1

Shift 2 Shift 3

# ofstaff 1 2 1Price /week $600.0

0$600.00 $600.00

Cost /shift(Total) $600.00

$1,200.00

$600.00

Staff Cost (Total)

$2,400.00


$2,516.97

(2,1,1)

(2,1,1)


# ofstaff 2 1 1Price /week $600.00 $600.00 $600.00Cost /shift(Total) $1,200.00 $600.00 $600.00


Overall Costs(Total) $2,667.86

(1,2,2)

(1,2,2)

Staff CostsShift 1

Shift 2 Shift 3

# of staff 1 2 2Price /week $600.0

0$600.00 $600.00

Cost /shift(Total)

$600.00

$1,200.00

$1,200.00

Staff Cost (Total)

$3,000.00


$3,100.68

(2,1,2)



(2,1,2)


# ofstaff 2 1 2Price /week $600.00 $600.00 $600.00Cost /shift(Total) $1,200.00 $600.00 $1,200.00

Staff Cost (Total)

$3,000.00


$3,244.51

(2,2,1)

Forecast: Total Delay CostStatistic Forecast valuesTrials 500Mean $41.24Median $39.34Mode '---Standard Deviation $13.50

Variance $182.17Skewness $0.89Kurtosis 4.15Coeff. of Variability 0.3273Minimum $12.55Maximum $100.18Mean Std. Error $0.60

(2,2,1)


# ofstaff 2 2 1Price /week $600.00 $600.00 $600.00Cost /shift(Total)

$1,200.00 $1,200.00 $600.00

Staff Cost (Total)

$3,000.00


$3,041.24

(2,2,2)

Forecast: Total Delay CostStatistic Forecast valuesTrials 500Mean $12.04Median $11.17Mode '---Standard Deviation $4.74Variance $22.49Skewness $0.75Kurtosis 3.46Coeff. of Variability 0.3938Minimum $1.67Maximum $28.78Mean Std. Error $0.21

(2,2,2)


# ofstaff 2 2 2Price /week $600.00 $600.00 $600.00Cost /shift(Total) $1,200.00 $1,200.00 $1,200.00

Staff Cost (Total)

$3,600.00


$3,612.04

Conclusion

Our simulation report objective was to determine

the number of staff that should be hired to maintain ABC’s

customer service reputation and cover for the new shifts at the

help desk. Our simulation concluded that ABC must hire at least

one person in each of the three shifts, for the business to keep

up their customer service reputation and minimize expenses. ABC

will have to maintain the same 1-1-1 structure to be most

effective in keeping the lowest costs because the additional cost

for an extra staff member is 600 dollars which does not compensate

enough from the delay costs. Despite this however, the highest

frequency of customers are going to be during the second shift

which our analysis would suggest that maybe having a better

compensation for the staff working on the second shift would give

them more motivation. Having said that, it is important that ABC

also concentrate on existing customers and offer them the same or

higher level of customer service as they use to receive, in

additional to the new customers. By using the simulation method,

and the crystal ball tool, we have learned how to deal with issues

that require large data, and how simulation makes decision-making

much easier.

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