The Case Study
Telemarketing Incorporated (TI) is a service company with its primary business base in the Rocky Mountain region. TI is a service organization in the business of collecting and selling information for contracted clients.
Production Information
TI made 5,221,782 calls in 2004 to households all over the Rocky Mountain region from its main telemarketing facility in Colorado Springs. There were a total of 330 working days in 2004, for which TI conducted telemarketing calls. In 2004 TI completed, on average, over 15,800 calls a day.
TI’s main facility was designed to achieve a capacity level of between 17,000–18,000 calls a day (from 7:00 a.m. to 12:00 midnight). However, company analysis has shown that the best operation level (BOL) for TI is 17,600 calls a day. At the BOL level, TI is able to achieve its lowest unit cost per call given several variables associated with the information collected and calling costs as contracted with clients.
TI has a company policy, which states, “Any one-month period where total calls exceed 500,000 the excess is considered service cushion or capacity cushion.” (Look at capacity cushion in this line of work along the line of a product-focused company that produces bottles, cars, computers, or some other tangible product in excess of demand.) The company is compensated for these “cushion” periods at a rate of $10 per call over 500,000 with a cap of 11,500 over the 500,000.
The following is a monthly breakdown of TI’s service call rates for all of 2004. This information was obtained in its raw form, and some normalizing of the data is required.
Table Information
You’ll need to normalize Table 1 below before completing the 14 questions that follow.
Table 1 – TI’s 2004 Monthly/Daily Production Data (Requiring Normalization) | ||
Month | Production Numbers | Number of Working Days During Month |
January | 15,000 units/day | 27 working days |
February | 15,900 units/day | 26 working days |
March | 419,720 units/month | 28 working days |
April | 16,790 units/day | 27 working days |
May | 504,900 units/month | 27 working days |
June | 17,600 units/day | 28 working days |
July | 391,972 units/month | 28 working days |
August | 12,897units/day | 29 working days |
September | 11,569 units/day | 27 working days |
October | 463,681 units/month | 29 working days |
November | 17,689 units/day | 27 working days |
December | 19,000 units/day | 27 working days |
Total: 330 |
Notes:
Answer the Following Questions Based on the Information Provided:
Questions:
Note: Do not exceed two pages in your discussion of this question. A solid one-page would be expected as the minimum in discussing/analyzing this question. Single or 1½ spacing is fine. Do not double space your work on this final question.