Cost of lost contribution margin for callers getting busy signals, assumed to be $100 per blocked call Cost of waiting by callers on hold, assumed to be $2 per minute per customer Now, with one CSR and five telephone lines, = 1 and = 4, the cost of the server is c K $20c = $20 per hour, and the cost of leasing telephone lines is $5(K + = (5)(4 + 1) = $25 per c) hour. We determined in Example 8.8 that the average number of customers blocked because of busy signals is = (20)(0.1007) = 2.014/hour Ri Pb The contribution margin lost because of blocking is therefore $100 = (100)(2.014) = $201.40/hour Ri Pb gave the average number of customers on hold as = 1.23. If each Performance.xls Ii waiting customer costs $2 per minute, or $120 per hour, the hourly waiting cost will be $120 = (120)(1.23) = $147.6/hour Ii The total operating cost, therefore, is $(20 + 25 + 201.4 + 147.6) = $394/hour Increasing the number of telephone lines increases the buffer capacity and, as above, we can K, compute the total cost per hour, as summarized in Table 8.2. Table 8.2 Effect of Buffer Capacity on Total Operating Cost Number of telephone lines 5 6 7 8 9 10 n
Cost of lost contribution margin for callers getting busy signals, assumed to be $100 per blocked call Cost of waiting by callers on hold, assumed to be $2 per minute per customer Now, with one CSR and five telephone lines, c = 1 and K = 4, the cost of the server is $20c = $20 per hour, and the cost of leasing telephone lines is $5(K + c) = (5)(4 + 1) = $25 per hour. We determined in Example 8.8 that the average number of customers blocked because of busy signals is Ri Pb = (20)(0.1007) = 2.014/hour The contribution margin lost because of blocking is therefore $100 Ri Pb = (100)(2.014) = $201.40/hour Performance.xls gave the average number of customers on hold as Ii = 1.23. If each waiting customer costs $2 per minute, or $120 per hour, the hourly waiting cost will be $120 Ii = (120)(1.23) = $147.6/hour The total operating cost, therefore, is $(20 + 25 + 201.4 + 147.6) = $394/hour Increasing the number of telephone lines increases the buffer capacity K, and, as above, we can compute the total cost per hour, as summarized in Table 8.2. Table 8.2 Effect of Buffer Capacity on Total Operating Cost Number of telephone lines n 5 6 7 8 9 10
BufferCapacityChopra.docx